Document of The World Bank Report No: ICR2867 IMPLEMENTATION COMPLETION AND RESULTS REPORT (TF-55967) ON A GRANT FROM THE GLOBAL ENVIRONMENT FACILITY TRUST FUND IN THE AMOUNT OF (US$7.66 MILLION EQUIVALENT) TO THE KINGDOM OF BHUTAN FOR A SUSTAINABLE LAND MANAGEMENT PROJECT December 20, 2013 Environment & Water Resources Unit Bhutan Country Management Unit South Asia Region CURRENCY EQUIVALENTS (Exchange Rate Effective, June 2013) Currency Unit = Bhutanese Ngultrum BTN 1.00 = US$0.02 US$1.00 = 60.20 BTN FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS B/C-Ratio Benefit-Cost Ratio BLSS Bhutan Living Standards Survey CAS Country Assistant Strategy CBA Cost Benefit Analysis CPS Country Partnership Strategy DANIDA Danish International Development Assistance DrukDIF Druk Dynamic Information Framework DYT Dzongkhag Yargye Tshodu EU European Union EUSPS Environment and Urban Sector Program Support FYM Farm yard manure GEF Global Environmental Facility GEO Global Environmental Objective GIS Geographic information system GNHC Gross National Happiness Commission GSPT Geog SLM planning team GYT International Bank for Reconstruction and Development ICR Implementation completion review and results IDA International Development Association IEG Independent Evaluation Group IFPRI International Food Policy Research Institute ISR Implementation status and results report M&E Monitoring and evaluation MoAF Ministry of Agriculture and Forests MTAC Multi-sectoral Technical Advisory Committee MTR Mid-term review NAP National Action Program NPV Net Present Value NRM Natural Ressources Management NSC National steering committee NSSC National Soil Services Center PAD Project appraisal document PDO Project Development Objective PLAMS Planning and monitoring system PMT Project management team RGoB Royal Government of Bhutan RNR Renewable natural resources SL&NRM Sustainable land and natural resource management SLMP Sustainable Land Management Project UNCCD United Nations Convention to Combat Desertification UNDP United Nations Development Programme QAG Quality Assurance Group QALP Quality assessment of lending portfolio Vice President: Philippe Le Houerou Country Director: Robert Saum Sector Manager: Herbert Acquay Project Team Leader: Marinela Dado ICR Team Leader: Darshani De Silva KINGDOM OF BHUTAN SUSTAINABLE LAND MANAGEMENT PROJECT CONTENTS DATA SHEET ............................................................................................................................................................. III A. Basic Information...................................................................................................... iii B. Key Dates .................................................................................................................. iii C. Ratings Summary ...................................................................................................... iii D. Sector and Theme Codes .......................................................................................... iv E. Bank Staff .................................................................................................................. iv F. Results Framework Analysis ..................................................................................... iv G. Ratings of Project Performance in ISRs ................................................................... iii H. Restructuring (if any) ................................................................................................ iii I. Disbursement Profile ................................................................................................. iv 1. Project Context, Development Objectives and Design ............................................... 1 2. Key Factors Affecting Implementation and Outcomes .............................................. 4 3. Assessment of Outcomes .......................................................................................... 12 4. Assessment of Risk to Development Outcome......................................................... 18 5. Assessment of Bank and Borrower Performance ..................................................... 19 6. Lessons Learned ....................................................................................................... 22 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 23 Annex 1. Project Costs and Financing .......................................................................... 24 Annex 2. Outputs by Component ................................................................................. 26 Annex 3. Economic and Financial Analysis ................................................................. 35 Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 40 Annex 5. Beneficiary Survey Results ........................................................................... 43 Annex 6. Stakeholder Workshop Report and Results................................................... 55 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ..................... 56 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 69 Annex 9. List of Supporting Documents ...................................................................... 70 MAP ............................................................................................................................................................................. 72 DATA SHEET A. Basic Information Bhutan - Sustainable Country: Bhutan Project Name: Land Management Project Project ID: P087039 L/C/TF Number(s): TF-55967 ICR Date: 09/28/2013 ICR Type: Core ICR Lending Instrument: SIL Borrower: RGOB Original Total USD 7.66M Disbursed Amount: USD 7.66M Commitment: Revised Amount: USD 7.66M Environmental Category: B Global Focal Area: L Implementing Agencies: Ministry of Agriculture and Forests; National Soil Services Center Cofinanciers and Other External Partners: Danish International Development Assistance (DANIDA) B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 01/20/2004 Effectiveness: 02/17/2006 Appraisal: 10/03/2005 Restructuring(s): 10/08/2012 Approval: 01/17/2006 Mid-term Review: 06/02/2008 09/08/2008 Closing: 12/31/2012 06/30/2013 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Global Environment Outcome Moderate Bank Performance: Satisfactory Borrower Performance: Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Satisfactory Implementing Quality of Supervision: Satisfactory Satisfactory Agency/Agencies: Overall Bank Overall Borrower Satisfactory Satisfactory Performance: Performance: C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project Quality at Entry No Moderately Satisfactory at any time (Yes/No): (QEA): Problem Project at any Quality of No Satisfactory time (Yes/No): Supervision (QSA): GEO rating before Satisfactory Closing/Inactive status D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration 20 20 General agriculture, fishing and forestry sector 55 55 Sub-national government administration 25 25 Theme Code (as % of total Bank financing) Biodiversity 14 14 Environmental policies and institutions 29 29 Land administration and management 29 29 Other rural development 14 14 Participation and civic engagement 14 14 E. Bank Staff Positions At ICR At Approval Vice President: Philippe H. Le Houerou Praful C. Patel Country Director: Robert J. Saum Alastair J. McKechnie Sector Manager: Herbert Acquay Jeffrey S. Racki Project Team Leader: Marinela E. Dado Malcolm A. B. Jansen ICR Team Leader: Darshani De Silva ICR Primary Author: Darshani De Silva F. Results Framework Analysis Global Environment Objectives (GEO) and Key Indicators(as approved) The Project Development Objective is to strengthen institutional and community capacity for anticipating and managing land degradation in Bhutan. The Project Global Objective is to contribute to more effective protection of trans-boundary watersheds in a manner that preserves the integrity of ecosystems in Bhutan. Revised Global Environment Objectives (as approved by original approving authority) and Key Indicators and reasons/justifications The PDO and GEO were not revised. (a) PDO & GEO Indicator(s) Actual Value Original Target Formally Revised Achieved at Indicator Baseline Value Values (from Target Values Completion or approval documents) Target Years Indicator 1 : Number of geogs implementing land degradation prevention development plans Value (quantitative or 0 +9 - +9 Qualitative) Date achieved 09/06/2006 06/30/2013 06/30/2013 Comments SLM were pilot tested in 3 geogs and scaled up in 6 additional geogs; hence 100% (incl. % achievement. achievement) Indicator 2 : Increase in farmers practicing SLM techniques in pilot geogs 255 (100 at Radhi, Value 75 at Nangkhor (quantitative or 650 1,805 and 80 at Qualitative) Phuentsholing) Date achieved 09/06/2006 06/30/2013 06/30/2013 Comments The actual figure exceeds the target by almost 200%. It is estimated that about 70% (incl. % of the total households are practicing SLM in both the pilot and scaling up geogs. achievement) Indicator 3 : 10% reduction in sediment flows in selected watersheds in pilot geogs Indicator measurement revised to reduction in soil loss based on erosion plots that Value provided more 10% reduction in 44% reduction in (quantitative or - relevant data on SLM sediment flow soil loss Qualitative) practices under different land conditions. (for details, see paragraph 11 of the main text) Date achieved 09/06/2006 06/30/2013 03/30/2007 06/30/2013 Comments The baseline established in 2009 was 52 MT/ha/year. At project closing, the total (incl. % annual soil loss was measured at 29MT/ha/year. achievement) (b) Intermediate Outcome Indicator(s) Original Target Actual Value Values (from Formally Revised Achieved at Indicator Baseline Value approval Target Values Completion or documents) Target Years Indicator 1 : Degraded forest land regenerated and grazing lands improved in pilot geogs Estimated at 2,664 acres of degraded forests (1,164 acres at Radhi, 500 acres at Nangkhor, 1,000 10% (or approximately Value acres at 31% (or 666 acres) of lands (quantitative or Phuensholing) and - approximately regenerated or Qualitative) 4,000 acres of 2,039 acres) improved degraded grazing lands (1,500 at Radhi, 1,000 acres at Nangkhor, 1,500 acres at Phuensholing) Date achieved 09/06/2006 06/30/2013 06/30/2013 Comments A total of 8,383.6 acres (~3,420 ha) of vulnerable lands has been improved of which (incl. % included 2,039 acres (~825 ha) in 3 pilot geogs and 6,412 acres (~2,595 ha) in 6 achievement) scaling up geogs. Indicator 2 : Tseri land (shifting cultivation lands) converted to sustainable land cover Estimated at 2,164 acres at Nangkhor and 2,968 acres at 30% (or approximately Value Phuentsholing. 69% 4,000 acres) of land (quantitative or Not relevant to - (approximately converted to Qualitative) Radi as 9,173.1 acres) sustainable land cover. most lands are under wetland agriculture Date achieved 09/06/2006 06/30/2013 06/30/2013 Comments The total ex-tseri land converted to more sustainable land use in nine project geogs is (incl. % 9,173.1 acres (~3,702 hectares) out of which 2,889 acres (~1,169 ha) in 3 pilot geogs achievement) and 6,259 acres (~2,533 ha) in 6 scaling up geogs. Intra and inter Dzongkhag and Geog conflicts over grazing and forest use resolved in Indicator 3 : pilot geogs Conflicts were identified and At least 10 conflicts Value resolved. No SLM planning identified and (quantitative or serious conflicts framework lacking addressed through Qualitative) during the final SLM action planning year of implementation. As part of conflict resolution, the Land Act 2007 was revised to modify agriculture, forest and pasture management practices addressing underline causes. Date achieved 09/06/2006 06/30/2013 06/30/2013 Comments Number of resource use conflicts arising among people were reduced; hence no (incl. % serious conflicts. achievement) Indicator 4 : RNR staff, DYT and GYT members trained in multi-sectoral SLM planning Value (quantitative or 0 +80% - 93% Qualitative) Date achieved 09/06/2006 06/30/2013 06/30/2013 Comments (incl. % About 88% RNR staff, 90% GYT members and 100% DYT members were trained achievement) Indicator 5 : Farmers trained in application of SLM technologies Value (quantitative or 0 4,500 - 17,237 Qualitative) Date achieved 09/06/2006 06/30/2013 06/30/2013 While the target value was training of 50% of farmers (or 4,500) in nine geogs, by Comments the closing date, 100% of farmers were trained in the application of SLM (incl. % technologies. In addition, farmers from other geogs with land management issues achievement) were trained. Indicator 6 : Sector policies and legislation incorporating SLM principles Value (quantitative or 0 At least 5 - 5 Qualitative) Date achieved 09/06/2006 06/30/2013 06/30/2013 Comments Achievement stands at 100% . Land Act 2007, National Land Policy 2010, National (incl. % Forest Policy 2011, National Adaptation Program of Action and National achievement) Biodiversity Action Plan incorporate SLM principles. Local resource management regulatory systems formulated and implemented for Indicator 7 : SLM outcomes Value (quantitative or 0 10 - 140 Qualitative) Date achieved 09/06/2006 06/30/2013 06/30/2013 Comments About 140 groups were formed of which about 37 agreements related to community (incl. % forests natural resource management and use were reached. achievement) Indicator 8 : Non-project funds channeled to SLM activities Value (quantitative or 0 No specific target - US$ 1,208,000 Qualitative) Date achieved 09/06/2006 06/30/2013 06/30/2013 Comments US$583,000 (from DANIDA) for DrukDIF, land cover mapping, training, social (incl. % assessment, soil fertility data improvement; US$ 100,000 from RGOB; UNDP GEF achievement) Small Grants Program (US $525,000). G. Ratings of Project Performance in ISRs Actual Date ISR No. GEO IP Disbursements Archived (USD millions) 1 09/08/2006 Satisfactory Satisfactory 0.58 2 03/30/2007 Satisfactory Satisfactory 0.72 3 09/27/2007 Satisfactory Satisfactory 1.06 4 02/02/2008 Satisfactory Satisfactory 1.24 5 08/19/2008 Satisfactory Satisfactory 1.82 6 10/12/2008 Satisfactory Satisfactory 1.82 7 05/09/2009 Satisfactory Satisfactory 2.52 8 11/26/2009 Satisfactory Satisfactory 3.46 9 05/22/2010 Satisfactory Satisfactory 3.89 10 11/24/2010 Satisfactory Satisfactory 5.56 11 06/08/2011 Satisfactory Satisfactory 5.99 12 01/01/2012 Satisfactory Satisfactory 6.61 13 06/24/2012 Satisfactory Satisfactory 6.86 14 12/19/2012 Satisfactory Satisfactory 7.50 15 05/23/2013 Satisfactory Satisfactory 7.66 16 06/26/2013 Satisfactory Satisfactory 7.66 H. Restructuring (if any) Board ISR Ratings at Amount Restructuring Approved Restructuring Disbursed at Reason for Restructuring & Key Date(s) GEO Restructuring Changes Made GEO IP Change in USD millions An extension of the closing date was approved to: (i) allow RGoB to mainstream and align some activities 10/08/2012 - S S 7.26 into national policies, such as the 11th Five Year Plan and the National Action Plan to combat desertification; (ii) consolidate the learning by farmers of Board ISR Ratings at Amount Restructuring Approved Restructuring Disbursed at Reason for Restructuring & Key Date(s) GEO Restructuring Changes Made GEO IP Change in USD millions ongoing SLM activities; and (iii) create awareness and political support for SLM among new local political leaders who have emerged since the last local election. I. Disbursement Profile 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal 1. Country and sector background. Bhutan’s usable land resource is limited, owing to its difficult and high mountain terrain, vast areas of snow and barren rocks, and large forests – which cover some 70% of the country. Arable land makes up less than 8% of the territory with most of it located in the central valleys and southern foothills. In those relatively flat areas, agriculture must coexist with other development activities of a population growing at 2.5% per year. Therefore, the total cultivated agricultural land accounts only for 2.93% of total land area . 1 The rural landscape of Bhutan is highly susceptible to landslides, soil run-off, and seasonal floods, owing to the country’s characteristically steep terrain, fragile geological conditions, and heavy rains. The areas of intensive land use suffer from soil erosion, landslides, forest degradation, and depletion of soil fertility. Factors such as overgrazing, deforestation, poor farming, poor soil and irrigation water management, and infrastructure development (e.g. roads) aggravate the land degradation problem. The Royal Government of Bhutan (RGoB) recognize the social and economic impacts of the problem, including the potential losses to life and property (mainly from landslides), reduced productivity, lower returns from public and private investments in infrastructure and farmlands and risks to environmental stability. 2. Project background. In 2003, Bhutan ratified the United Nations Convention to Combat Desertification (UNCCD) and was eligible to receive Global Environmental Facility (GEF) support under Operational Program 15 on Sustainable Land Management (SLM). 2 Bhutan has been party to the United Nations Convention on Biological Diversity and the United Nations Framework Convention on Climate Change since 1995. 3. The Sustainable Land Management Project (SLMP) was financed by a GEF grant of US$7.66 million. The grant was GEF’s first investment in the reduction of land degradation in Bhutan. It was GEF’s response to RGoB’s commitment to the United Nations Convention on Combating Desertification ratified in 2003. The project received parallel financing of US$5.77 million from the Danish International Development Assistance (DANIDA). RGoB supported the project through the renewable natural resources (RNR) programs of the Ministry of Agriculture 3 -- of US$2.46 million – that were implemented with the participation of local communities. Therefore, the total investment in the project amounted to US$15.89 million. 4. Rationale for Bank assistance. The Bank actively worked with GEF and other donors in a number of countries to support SLM initiatives. The Bank’s comparative advantage as GEF implementing agency stemmed from its long-standing partnership with Bhutan, its experience in community-driven and participatory approaches and ability to leverage donor funding (such as 1 Data from Land Cover Mapping Project, 2010 2 SLM was defined at the UN Earth Summit in 1992 as “the use of land resources, including soils, water, animals and plants, for the production of goods to meet changing human needs, while simultaneously ensuring the long-term productive potential of these resources and the maintenance of their environmental functions”. It has been further defined as “the adoption of land use systems that, through appropriate management practices, enables land users to maximize the economic and social benefits from the land while maintaining or enhancing the ecological support functions of the land resources” by TerrAfrica, 2005 (http://www.fao.org/nr/land/sustainable-land-management/en/) 3 Ministry of Agriculture renamed Ministry of Agriculture and Forest (MOAF) in January 2010. 1 DANIDA). The Country Assistance Strategy (CAS) that was in place at the time of appraisal put emphasis on the need to support environmental efforts to achieve the strategic objectives. 4 Specifically, this project was expected to foster approaches, tools, and interventions to manage land sustainably as well as to reverse damage to land due to weak policies, overgrazing, forest degradation and unsustainable agricultural practices. 1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) 5. The PDO was to strengthen institutional and community capacity for anticipating and managing land degradation in Bhutan. 6. The key PDO indicators were: • Increase in number of farmers practicing sustainable land management techniques • Number of geogs implementing land degradation prevention development plans 5 1.3 Original Global Environmental Objectives (GEO) and Key Indicators [as approved]: 7. The GEO of the project was to contribute to more effective protection of trans-boundary watersheds in a manner that preserves the integrity of ecosystems in Bhutan. 8. The key GEO indicator was: • 10 percent reduction of sediment flow in selected micro-watersheds in pilot geogs 1.4 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification 9. The PDO was not revised. 1.5 Revised GEO (as approved by original approving authority) and Key Indicators, and reasons/justification: 10. The GEO was not revised. However, the measurement for its associated indicator – reduction in sedimentation in selected micro-watersheds – was revised in March 2007 for the following reasons. First, measuring the reduction in sediment flow in selected micro-watersheds in the pilot geogs would have required time series data for establishing a baseline for subsequent monitoring of mountain stream discharge and that was too difficult to undertake. Second, sediment flux is not easily quantifiable because of its dependence on peak flow occurrences. Finally, even if the changes in sedimentation flow were quantifiable, the reduction in sediment influx in micro-watersheds could not be attributed exclusively to SLM practices. Hence, it was agreed that a more appropriate measurement would be to use erosion plots to quantify and 4 Report No. 33704-BT7 FY2006-2009 5 Geog/Gewog: Local government administrative area (block) or lowest level of local administration in Bhutan, set up between village level (Chiog) and district level (Dzongkhag) 2 monitor the reduction of run-off and soil erosion in the pilot geogs as the positive effects of SLM practices. 1.6 Main Beneficiaries 11. The entire country and targeted rural communities were the project’s principal beneficiaries. The project aimed to benefit Bhutan through strengthened human capacity at all levels to systematically coordinate activities to manage land degradation. The project also envisaged the introduction of: (i) tools and systems to identify and address incidences of land degradation; and (ii) legislation and policies related to watershed management, agriculture, livestock and forestry and planning and development that would benefit the country. 12. The project was implemented in 138 chiogs 6 (villages) in nine geogs that are part of three dzongkhgs (districts). The envisaged benefits were improved agriculture and livestock yields, better income, conservation of agriculture, pasture and forest land, and capacity to sustainably manage the land in the long term. The targeted communities included 4,500 households and approximately 31,000 people living in land degradation hot spots in Bhutan, as well as individuals and institutions benefited from project’s technical and institutional development activities. 1.7 Original Components (as approved) 13. Component 1: Pilot projects to demonstrate effective application of land degradation prevention approaches (US$1.37 million). The pilots were intended to be implemented in three geogs 7 which were selected to represent the range of land degradation pressures across the country. Component 1 had three sub-components: (i) development of a GIS (geographic information system)-based biophysical and socio-economic mapping exercise to identify the causes and incidence of land degradation; (ii) use of the information generated from the mapping exercise to identify “hot spots” and assess the presence or absence of incentives that guide farming practices and inform community decisions; and (iii) support for community decision making and prioritization of potential SLM investments at the chiog level. 14. Component 2: Mainstreaming of practices for protection against land degradation (US$4.41 million). This component aimed to support the scaling up of the pilots to six additional geogs (two in each of the pilot dzongkhags 8) based on the lessons learned from Component 1. The support to additional geogs would be phased and would start in geogs where there was substantial potential for successful SLM interventions and where existing capacity was adequate. 15. Component 3: Policy support and guidance for mainstreaming land degradation prevention practices (US$1.05 million). This component sought to consolidate the lessons from Component 1 and 2 to inform national legislation and policies pertaining to watershed 6 Chiog: Village level with elected representative of Tshogpa (Elected head of a village) 7 The three geogs were Nangkor in Zemgang Dzongkhag, Phuntshooling in Chhukha Dzongkhag and Radhi in Trashigang Dzongkhag. 8 Dzonkhag: Administration and judicial district 3 management, upland agriculture and livestock, forestry, urban planning and infrastructure development. It would provide technical assistance to develop guidelines for mainstreaming SLM principles into RGoB’s five-year plans as well as annual and five-year plans of geogs and dzongkhags by compiling and disseminating the lessons learned from pilot sites, policy guidance notes, capacity building and awareness workshops. 16. Component 4: National level support for coordination of implementation of land degradation prevention practices (US$0.81 million). This component intended to support RGoB’s efforts to strengthen and build capacity within the Ministry of Agriculture and Forests (MoAF) to systematically and effectively coordinate a program of activities for anticipating and managing land degradation in the country. It would provide over-arching support across different sectors (i.e. agriculture and natural resources, roads, infrastructure, etc.) and different levels of government (i.e. geogs, dzongkhags and central levels) for SLM activities. 1.8 Revised Components 17. The components were not revised. 1.9 Other significant changes 18. Project schedule. A Level II project restructuring was carried out in October 2012 to extend the closing date of the project from December 31, 2012 to June 30, 2013 without any change to the project cost. The extension aimed to assist RGoB toward consolidating the PDO and project outcomes. It was expected that RGoB would mainstream some activities introduced in the latter part of the implementation period, reinforce and sustain the project benefits through integrating into the eleventh five-year plan and scale up SLM as an important tool for the management of Bhutan’s land and land resources. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry 19. Soundness of background analysis. Despite Bhutan’s good governance and long- standing commitment to environmental sustainability, the practices and institutions existing at the time of preparation were unable to adequately address ecological pressures from rapid urbanization and development. Because SLM was a new priority area, the GEF project preparation grant supported much-needed analysis of sector issues linked to environmental sustainability, global practices for addressing the drivers of land degradation and the possible impact of government strategies on project implementation and sustainability. 20. Two alternatives were considered in arriving at the selected design: (i) strengthening the sectoral approach existing at the time of preparation; and (ii) introducing payments for environmental services (PES). Those options were rejected because SLM requires the collective effort of a number of sectors and the data for the establishment of PES and the complex task of valuation of environmental services were not available. Also, downstream users were not willing to consider compensating upstream inhabitants for ecosystem services that were 4 considered to be free. The selected design was based on community decision making that would effectively incorporate ecological, economic and social dimensions into sustainable land use decisions and investments at all levels. 21. The project design was informed by the lessons from ongoing and completed projects in the environment sector that were supported mainly by the United Nations Development Programme (UNDP). It also took into account the lessons from Independent Evaluation Group (IEG) project evaluations on the importance of considering size, remoteness and capacity in designing projects including the IEG’s Country Assistance Evaluation for Bhutan. 9 Therefore, the design incorporated the need to pilot SLM approaches, reliance on existing institutions and systems to comply with fiduciary requirements and strengthening capacity when required. 22. Five principles guided project design: a bottom-up approach, phased implementation, decentralization, use of knowledge and information on farmer incentives and an integrated multi- sectoral approach. Project preparation placed huge emphasis on participatory planning from the bottom up (chiog, to geogs, to Dzongkhags that focused on community priorities. Such bottom- up approach was innovative for Bhutan and its communities. The phased approach allowed for adjustments throughout implementation based on the learning that emerged from the pilot efforts. The project design supported the existing decentralization by strengthening the role of communities and local authorities in natural resource management. The project integrated the planning and investment of three key sectors – agriculture, livestock and forestry – that are closely linked to the livelihoods of the rural communities and the wellbeing of the natural resource base. In addition, the preparation incorporated an extensive focus on social issues to ascertain the social acceptability of proposed activities and potential negative impacts on vulnerable groups, while ensuring that solutions responded to the environmental problems arising from land degradation. 23. The institutional framework of shared overall implementation responsibility by MoAF and the local administrations was appropriate because the effective coordination of agencies. The need for three sectors to work closely for effective natural resource management was deemed to require a multi-sectoral technical advisory committee (MTAC). The MTAC was convened to provide oversight and technical support and to ensure timely delivery of inputs and actions and effective mainstreaming of field results into national and sectoral policies and programs. 24. Adequacy of participatory processes. The preparation entailed a participatory and inclusive process of direct and systematic engagement with beneficiary communities in the planning, selection, implementation, and monitoring of activities. Stakeholder participation was secured through: (i) national consultations and workshops; (ii) meetings of the MTAC and joint national steering committee (NSC) 10; (iii) field surveys and study visits; (iv) geog and chiog 9 Operations Evaluation Group, 2004. Bhutan – Country Assistance Evaluation. The World Bank, Washington DC. (Operations Evaluation Group is now known as IEG) 10 A joint national steering committee was set up to coordinate SLMP and DANIDA financed Environment and Urban Program Support 5 level workshops, meetings and consultations especially in the three pilot project locations; and (v) dzongkhag level consultations. 11 25. Adequacy of government commitment. RGoB’s commitment to address land degradation was demonstrated by: (i) the July 2004 recommendation of the National Assembly to review the 1979 Land Act; (ii) a high level technical meeting held in October 2004 and chaired by the Minister, MoAF that focused on the urgency of the problem; (iii) a land management campaign in eastern Bhutan launched in July 2005 by the Minister, MoAF; and (iv) incorporation of policy initiatives against land degradation policy to implement the goals of the Ninth Five Year Plan (2002-2007) one of which was environmental conservation. The latter included the plan to develop a new grazing policy as well as SLM related information management systems at the central and dzongkhag level with DANIDA support. In addition, MoAF undertook a major shift from sector-based planning to area-based planning to address land degradation in the subsequent five-year plan. Hence, the Tenth Five-Year Plan (2008-2013) incorporated an increase in the national budgetary resources for SLM. RGoB formed a qualified team of government staff to work closely with the Bank during project design and preparation. Finally, RGoB committed US$1.51 million for project implementation as its contribution. 26. Risk assessment. The Project Appraisal Document (PAD) identified several potential risks and mitigation measures. The overall risk of the project was rated moderate. The rating proved to be appropriate for the type and scale of the proposed interventions as well as the level of capacity, commitment and governance within which the project was to be implemented. During implementation, the overall risk was revised to low because most of the risks identified at appraisal were managed adequately with appropriate mitigation measures. 27. Quality at entry rated by QAG. Moderately satisfactory/likely. (See 5.1(a)) 2.2 Implementation 28. Implementation progress was satisfactory throughout the project period. The grant funds were fully disbursed. All outcome/ and output targets were met by the revised closing date. 29. The project’s uncomplicated design complemented the emerging context for SLM at the time of preparation. It took into account Bhutan’s limited financial and human resources and the remoteness of the project sites. 12 The stakeholders adhered to the project’s five principles formulated at the design phase (described in sub-section 2.1). As such, the participatory multi- sectoral approach that allowed for adjustments throughout implementation was fruitful. The approach resulted in the: (i) involvement and ownership of communities in natural resource 11 The major stakeholders relevant to the project were policy makers, national and district level government agencies, national and district level technical and research institutions, civil society organizations and academic institutions. Local stakeholders comprised local government agencies, farmers, herders, forest dependents, local municipalities and their populations, and other local citizens. 12 Operations Evaluation Group, 2004. Bhutan – Country Assistance Evaluation. The World Bank, Washington DC. 6 planning and decision making; (ii) integrated planning of resources that impact three sectors, i.e., agriculture, livestock and forestry; (iii) testing and grounding of traditional approaches to SLM and new technologies; as well as (iv) identifying cost effective SLM technologies for investment. Specifically, implementation led to improved knowledge of 17,237 farmers across Bhutan and to the provision of benefits to 21,613 males and females in the project sites from SLM investments covering about 70% of the targeted population. 30. The structure of the project management team (PMT) was aligned with that of MoAF, allowing for relatively coordinated and consistent implementation across the project sites. A hands-on management approach along with high staff commitment facilitated monitoring, troubleshooting and continuous enhancement of interventions. Weak capacity at inception was resolved in due course by enlarging the PMT to comprise not only key personnel from MoAF but also other ministries and by tapping experts who strengthened the PMT’s knowledge. 13 The PMT, with the support of other relevant departments, carried out a training needs assessment that formed the basis for the capacity building program supported under the project. Because of the project’s pilot approach, it allowed the PMT to try and test techniques during implementation before the wide scale adoption or replication of methodologies. 31. New activities that had not been envisaged during preparation were added during implementation to enhance the project’s outcomes. They included: (i) updating of land use and land cover maps for Bhutan that led to improved planning and monitoring of SLM and other area-based development activities and created the potential for natural resource risk management; (ii) development of the Druk Dynamic Information Framework (DrukDIF) as a decision-support tool that could test future scenarios of land use changes and climate change; (iii) additional financial, technical, training and marketing support to the pilot and scaling-up geogs and short-term incentives to improve farm and non-farm incomes and livelihood diversification; 14 and (iv) provision of non-formal and vocational training to literate, semi- literate and vulnerable community members. The extension of the closing date permitted the consolidation of these new activities and full disbursement of the GEF grant. 32. Operational challenges. While no significant issues impeded the implementation of each component, the early stages of implementation faced operational challenges because the project is a pilot effort. Implementation began slowly because of: (i) inadequate engineering expertise at the geog/dzongkhag level to support the water resources/irrigation canal rehabilitation; (ii) lack of citrus seedlings for the promotion of orchards; and (iii) RGoB’s audit constraints that restricted the purchase of supplies from non-formal suppliers when the National Seed Centre and other licensed private suppliers faced shortages. Subsequent enhancements to coordination and 13 Consultants were engaged in the initial stages of project implementation to fill knowledge gaps in particular areas. The new knowledge was transferred successfully to technical staff in relevant institutions within RGoB. MoAF agreed to assign a dedicated project manager who was relieved from regular duties during the implementation period. However, the rest of the team including the project director and technical staff carried out their project responsibilities along with their regular functions. No special incentives were provided to the team. Because project implementation was incorporated into career development strategies, the staff owned it fully and demonstrated the commitment. 14 Although the communities understood the importance of SLM, significant underlying factors such as poverty and scarce farm labor (due to urban migration of able bodied community members) needed to be addressed. In the early stages of implementation, it was recognized that community participation would be a challenge and therefore the incentives were developed in part to overcome the difficulties of eliciting community interest in the adoption of SLM practices which are highly labor intensive. 7 involvement of sectoral expertise facilitated infrastructure rehabilitation. After some delay, the seedlings became available for orchard planting and restrictions of purchasing supplies were resolved. 33. The high turnover of key PMT members in the initial stages – due to departure for the pursuit of higher education and to routine transfers – affected implementation. This was a result of a small number of public servants in the RGoB. Most importantly, the project manager changed four times and the frequency of the changes resulted in the varying degree of compliance with fiduciary requirements. In the last four years, the PMT composition was stable with the absence of any significant changes. 34. The transfer of funds to the geogs was delayed which led to a lag in the disbursements of the GEF grant and other funding sources because the geogs did not have banks or bank accounts, thus constraining implementation in the first two years. This issue was resolved through a revision of the initial fund flow release mechanism to one that was adapted to prevailing conditions. The change was determined to be acceptable in terms of financial management. Fiduciary training was provided to ensure that the PMT managed implementation in compliance with the Bank’s requirements. 35. Mid-term review. The Bank conducted a mid-term review (MTR) in September 2008 that also involved the participation of the Danish Environment and Urban Sector Program Support (EUSPS) and UNDP's GEF Sustainable Land Management Medium Sized Project. The joint review was aimed at assessing the progress and constraints in implementing SLM and environmental management programs and identifying opportunities for further harmonization and alignment among the three donor-supported programs. 36. The MTR led to a set of coordinated recommendations to consolidate the successes of each project component and most of them were implemented in subsequent years. These included: (a) enhancing farm and non-farm income generation activities during the chiog work planning exercises; (b) providing financial and technical support to pilot geogs beyond the initial three-year implementation period in order to build further commitment and implementation capacity for SLM; (c) documenting and disseminating methodologies for participatory planning and mapping that had been tested and refined in the field, as well as other relevant learning experiences and best practices in SLM and lessons emanating from the project; (d) supporting the development and testing of methodologies and tools for linking SLM planning at the geog level to area-based planning at dzongkhag level; (e) continuing to accommodate thematic proposals to replicate successful SLM techniques and contribute to improved understanding of natural resource management issues at the national and dzongkhag levels; and (f) improving the collaboration with EUSPS in implementing Component 2. 37. During the MTR, MTAC members visited pilot geog sites to review progress and impact and continued to join the PMT on monitoring visits, thereby enhancing their advisory role. RGoB provided additional staff to the PMT in the third year of implementation. Improvements were made to the procurement planning processes at the dzongkhag level and to the internal controls for timely fund flows and financial monitoring. 8 38. Quality of implementation rated by QAG. Satisfactory/likely. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 39. M&E design. A results framework and a detailed and participatory monitoring and evaluation mechanism were part of the PAD. The indicators of the results framework were adequate to report on the objectives of the project. At the outset, baseline information was not available for many indicators as the existing tools for establishing the baseline were impractical and would not have provided reliable data. The development and application of new analytical tools for establishing biophysical and socio-economic baselines to inform chiog and geog SLM planning were carried out as the implementation commenced. In late 2012, two core sector indicators required by the Bank were introduced with a view to better reporting of the project outcomes. Overall, the M&E mechanism provided (a) opportunities for continuous feedback regarding the extent to which the project was achieving its goals, (b) identification of potential problems at an early stage and possible solutions, (c) monitoring the efficiency with which the different components of the project were implemented as well as introduction of improvements that facilitated mid-way corrections, (d) incorporated stakeholders’ views and (e) influenced planning and decision-making. 40. M&E implementation. The regular RGoB monitoring system through MoAF was routed to the RNR sectors from the geog to the dzongkhag levels and was ultimately reflected in MoAF’s program. The latter was linked to and reflected in RGOB’s Tenth Five Year Plan. Achievements were monitored through the web-based planning and monitoring system (PLAMS) managed by the Gross National Happiness Commission (GNHC). The data and information from MoAF’s monitoring subsequently fed into the PMU’s tracking system for reporting to the Bank on the progress vis-a-vis the results framework. 41. As described in paragraph 11, the measure for GEO indicator on sedimentation at micro- watershed level was replaced by reduction of soil erosion in the project sites. The implementing agency introduced erosion plots to quantify the reductions in run-off and soil erosion as the positive effects of SLM activities. The erosion plots served to demonstrate the effectiveness of the project’s SLM interventions. It also provided a good communication and training tool for convincing farmers about the potential contribution of SLM activities to land productivity and prevention of soil loss. The introduction of additional proxy indicators during implementation allowed for better determination of the project achievements. Process monitoring was carried out to identify implementation challenges and good practices for replication and to strengthen implementation continuously. The MTR’s joint evaluation with other funding agencies helped in disseminating best practices and lessons learned more widely and influencing policy decisions. 42. M&E utilization. The monitoring responsibilities were carried out at all administrative levels. Data collection at all levels was adequate and was built into the bottom-up planning process. The farmers received training in data collection in addition to SLM techniques. Consolidated M&E reports were prepared and submitted bi-annually. The MTR found that SLM activities were too spread such that they did not provide readily tangible evidence of the SLM benefits as a result of the project. Hence, further investments were made in two villages per geog identified randomly for demonstration purposes while still continuing the SLM support 9 planned in all target villages. The data collected by MoAF and PLAMS were evaluated and used for decision-making beyond the project activities, including the preparation of the Eleventh Five Year Plan, the 2010 land cover update as well as national planning and decision making by the Ministry of Finance, GNHC, MoAF and other government and non-government organizations. 2.4 Safeguard and Fiduciary Compliance 43. Safeguard compliance. As a category B project, the safeguard policies on environmental assessment (OP/BP 4.01), forests (OP/BP 4.36), and pest management (OP 4.09) were triggered in addition to locally applicable policies, laws and regulations. An Environmental Management Framework was developed as part of project preparation to guide the management of potential environmental impacts. The Social Assessment adopted a process framework for the participation of local communities in implementing SLM activities to ensure transparency and equity related to potential livelihood impacts. 44. Environmental and social safeguard compliance is rated satisfactory. The environmental and social screening processes identified were subsequently mainstreamed into the SLM planning process which integrated environmental and social concerns into activity planning at the chiog level. The practice of integrated planning ensured the likelihood of continued attention to prioritizing and selecting SLM interventions beyond the project period. The impacts – particularly the resource-linked differences in the benefits of the interventions – were regularly monitored during implementation by the geog SLM planning teams and field coordinators. The SLM plans and bylaws for community forestry, water use, etc. were validated and endorsed at the chiog and geog levels, thereby ensuring local ownership throughout implementation. The interventions that restricted access to natural resources were identified and the chiogs carried out consultations to resolve the issues. Any intervention with negative environment or social impact which could not be mitigated was dropped from the chiog’s SLM plan. There were no cases of environmental or social issues that were not successfully managed. 45. Fiduciary compliance. This aspect is rated satisfactory. Fiduciary covenants were complied with during implementation. Internal controls were in place and further improvements were made after the MTR. The financial management system and records were adequate. There was no reported mis-procurement of activities. 2.5 Post-completion Operation/Next Phase 46. Transition arrangements. The transition arrangements for sustaining the project’s outcomes seem adequate. (i) Institutional. In December 2012, MoAF approved the establishment of an SLM unit within the National Soil Services Center (NSSC) to build on the SLM initiatives and mainstream SLM at the national, district and local levels. The SLM unit will continue to employ field- level and central NSSC staff members who were involved with SLMP. At the field level, trained geog SLM planners, extension workers, and geog heads will ensure that SLM activities are integrated into the development planning at the geog level. The beneficiary survey results indicate the high likelihood of continued integration of SLM in agriculture, livestock and forestry sectors because of the relevant training provided to farmers. During 10 implementation, linkages were developed with the research and development centers (RDCs) that helped expand technical support to non-project areas. Those linkages will be strengthened in implementing the Eleventh Five-Year Plan. Indeed, Volume 1 of the Eleventh Five Year Plan document incorporates the adoption of SLM approaches in geog level planning. (ii) Financial. The project was designed and implemented as a pilot effort and confirmed by the selection of the project sites – 3 pilot geogs and 6 scaling up geogs. Due to its limited resources, RGoB may be able to provide some financing for the broad-based implementation of SLM approaches throughout the country but it may require external funding for SLM on a wider geographical scale. MoAF and NSSC requested an in-depth assessment of the economic benefits of SLM and the Bank secured trust fund support to engage the services of the International Food Policy Research Institute (IFPRI) to conduct a comprehensive economic assessment of SLM in Bhutan. It is envisaged that the report would reach out not only to national policymakers but also to possible financiers. For pragmatic purposes, the IFPRI draft was aimed at informing the ICR and the final report will be shared with RGOB and stakeholders. 15 (iii) Technical. NSSC is equipped with adequate laboratory facilities and technical staff with SLM expertise to provide technical support to geogs and farmers. NSSC strengthened its linkages with the RDCs whose staff will work as focal resources at the regional level. The local leaders and extension officers trained in SLM techniques will ensure the continued planning and adoption of SLM at the local level. Based on the ground interventions and training conducted during the project period, a number of manuals were developed for the purposes of documenting, as well as for future training needs. SLM was incorporated into standard training of extension agents. (iv) Policies. In addition to MoAF policies that promote SLM in key sectors, the completion of the National Action Program aligned to the UNCCD 10-year strategy would be a vehicle for mainstreaming SLM into national and sectoral plans and policies. 47. As described throughout this document, the project design and implementation were aligned with the intent to pilot SLM practices. The GEF grant was not intended to support a nation-wide introduction and application of SLM approaches. On the other hand, the grant led to two impressive outcomes: (i) the demonstration of good SLM practices with ownership by communities; and (ii) the replicability of the participatory approach and the tested techniques. Moreover, the staffing of the SLM unit at NSSC represents a de facto financial commitment by RGOB to apply SLM beyond the project’s three pilot geogs and the six scaling-up geogs. As described above, the SLM unit will collaborate and link up with the RDCs and the local officials and communities. MoAF and GNHC conveyed to the ICR team their aspiration for grant funding to take SLM one step further – the possibility of designing and implementing a project that addresses river basin level/watershed level issues stemming from land degradation with linkages to disaster risk management and adaptation to climate change. Finally, an impact 15 IFPRI launched the Economics of Land Degradation (ELD) Initiative in 2011 to examine globally the economic benefits of land and land based ecosystems. ELD emphasizes the value of SLM and provides an integrated global approach for the analysis of the economics of land degradation. To date, IFPRI's research covered eight countries of the Mashreq and Maghreb sub- regions as well as Ethiopia, Ghana, Honduras, India, Kenya, Peru, Niger, Senegal, Uganda and Uzbekistan. 11 evaluation of the project in two or three years that would fully reflect the physical impact of SLM may be considered. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation 48. The objectives of the project are highly relevant, timely and appropriate to the current needs of Bhutan’s renewable natural resource sector and country’s vision. 16 Improved land management can reduce long-term fiscal expenditures on sectors such as agriculture, livestock, hydropower, water, etc. and increase the resilience of the land and critical watersheds and communities dependent on the land to natural disasters and impacts of climate change. 49. SLM is in line with RGoB policies and legislation on agriculture, livestock, water resources, irrigation, forestry, biodiversity and land. The project contributed to RGoB’s mandate of maintaining 60% forest cover through afforestation activities in degraded land. The project remains relevant because of the multi-sectoral approach identified in the National Land Policy 2010 toward reducing the demand for land, improving its productivity and promoting sustainable agriculture. It encouraged sustainable management and development of land areas identified as critical for national food security, good ecosystem services, hydropower generation, forest management, etc. The country’s National Forest Policy (1974 and 2011) aimed at the protection of land, its forest, soil, water resources and biodiversity against degradation calls for continued adoption of proper SLM practices and systems. The national development goals and targets presented in the Eleventh Five Year Plan (2013-2018) provide the opportunity to continue mainstreaming SLM as part of poverty reduction, agriculture diversification and responsiveness to emerging issues, such as climate change. 17 50. The core design of the project and implementation arrangements remains highly relevant and appropriate in terms of the country context. The principles that guided project design are significant for sustaining SLM interventions and they continue to contribute to the global environmental objective of arresting and reversing land degradation. The project activities promoted an effective and efficient SLM planning process within the broader development planning efforts at all administrative levels. The project investments are highly relevant to the achievement of RGoB priorities, such as self-reliance in food, reduction in income poverty and increased hydropower generation through better watershed management. RGoB’s commitment to SLM and the project activities generated a significant change in the recognition and acceptance nationally and locally about the importance of SLM. All of the stakeholders interviewed by the ICR team and 98% of the respondents to the beneficiary survey confirmed the high relevance of the project design and implementation. 16 Bhutan 2020 – A Vision for Peace, Prosperity and Happiness, is a Vision statement taking stock of the past development performance and presenting the challenges under broad thematic topics like nation, people, economy, environment and institutions. The document also describes guiding principles for change and development including environmentally sustainable development. 17 The top three economic activities contributing to GDP are (i) construction with 16.3%, (ii) agriculture with 15.7% and (iii) electricity and water with 13.9%. 12 51. While the project was designed during the implementation of the 2006-2009 CAS, its objective is consistent with the Bank’s current Country Partnership Strategy (CPS) where environmental sustainability is a cross-cutting theme. 18 The CPS highlights the importance of environmental stewardship, application of environmental safeguards, disaster risk management and adaptation to climate change and all of these priorities are linked to SLM. The Bank’s implementation support responded to the changing needs toward achieving the development and global environmental objectives through the incremental inclusion of capacity building activities, such as the development of a decision-making tool 19 aimed at addressing the need for better watershed management and adaptation to climate vulnerabilities. 3.2 Achievement of Project Development Objectives 52. The project is rated satisfactory vis-à-vis the achievement of the PDO and GEO. 53. The overall project achievements are significant with results exceeding the targets in some cases. Specifically, SLM benefits reached 70% of the farming households compared to the target of 30%. At closure, the targets related to reducing land degradation toward the effective protection of watershed, maintaining the integrity of ecosystems and increasing the capacity to respond to land degradation issues were met with high efficacy. The achievements are described below for the key PDO and GEO outcome targets. 54. Capacity building in addressing land degradation. The project was successful in strengthening institutional and community capacity for anticipating and managing land degradation as well as in transforming the attitudes of land users on the significance of SLM. The country’s knowledge base increased with the training and technical assistance provided to NSSC staff. In turn, the latter shared their expertise on the management and monitoring of land degradation with the geog officials and field coordinators and ultimately with 17,237 farmers cross Bhutan who practiced their newly acquired skills in appropriate and cost-effective SLM techniques. 55. Local government planning improved as geog planners gained more confidence in the use of participatory tools as well as multi-sectoral and area based planning. Staff of the National Biodiversity Center and Department of Hydro-Meteorological Service benefited from training in rapid biodiversity assessment of watersheds and land use cover mapping. The project enhanced the National Land Commission Secretariat’s capacity to raise awareness on land use and to implement the rules and regulations of the 2007 Land Act more effectively. The expanded partnership and linkages between NSSC and RDCs enabled the replication and scaling up of SLM best practices in many parts of the country 20 and institutionalizing SLM in research and 18 The CPS (Report No: 56577-BT; dated October 27, 2010) covers 2011-14. 19 DrukDIF is a “multi-layered” environmental information system that would help analyze the resource base and develop productive scenarios and appropriate interventions based on variations in climatic conditions and ecosystems. The system was developed to serve as a decision-making tool on the allocation and use of land and land resources, location and operation of future hydro-power facilities and key infrastructure, development of strategies for improving agricultural productivity and poverty alleviation as well as management of land erosion and land degradation. In addition, it is aimed at organizing, storing and making accessible natural resources management data. 20 As a result of capacity building, about 40 geogs beyond the targeted geogs expressed the interest to adopt SLM practices in their respective chiogs out of which 23 geogs were implementing SLM practices at the closure of the project. 13 development. The improved capacity of government institutions influenced the reforms that took place after the introduction of two key policies, a regulation and two action plans 21 as well as the adoption of 140 local level natural resource management regulatory agreements. 56. Adoption and implementation of land degradation prevention plans (target: in at least 9 geogs). Prevention plans were adopted and are under implementation in 9 geogs. With the outreach efforts and improved their knowledge and skills in participatory rural planning and decision-making made possible by the project, 23 additional geogs adopted SLM planning and implementation. Dzongkhag and geog officials gained the capacity to undertake natural resource surveying and mapping and multi-sectoral SLM planning. Over 50% of the farmers in the targeted geogs learned to identify and prioritize SLM needs and develop action plans to reduce land degradation. According to the beneficiary survey results, stakeholders benefited from the methodology for SLM action planning because of its relevance to overall development planning. 57. Multi-sectoral and participatory planning introduced by the project was adopted in other donor-funded programs (e.g., DANIDA) and in the preparation of the Tenth and Eleventh Five Year Plans. The current RNR Five Year Plan includes a national SLM program for a majority of geogs in the country. 58. Increase in the number of farmers practicing SLM techniques (target: 30% increase). The project sites were located in areas of high incidence of land degradation which are inhabited by most of the country’s poorest and most vulnerable communities. For the most part, the communities were reluctant to change their traditional livelihood practices especially if the benefits from the changes would materialize fully only in the long term. To ensure the participation of the communities, short-term incentives – in the form of income-generating activities – were combined with the adoption of SLM techniques. They included vegetable production in kitchen gardens, production of farm yard manure, dairy shed farming and bamboo planting. These activities also resulted in a positive impact on natural resources management because they reduced the dependence by the communities on non-wood forest products (e.g. fodder) and helped stabilize the land and control soil erosion. These achievements were confirmed by over 97% of respondents to the beneficiary survey who claimed that they benefited from higher incomes and improvements to the productivity of their land resources. 59. In comparison to the baseline of 255 farmers in three pilot geogs and 500 farmers in six scaling up geogs, project implementation led to the adoption of SLM practices by over 1,800 famers in the pilot geogs and some 1,300 farmers in the scaling up geogs, which contributed to an exceeded target of 70% increase. The actual figures represent a four-fold increase over the baseline data. 60. Achievement of the GEO. As explained in paragraph 11, the GEO monitoring indicator was revised. Because of the difficulties in the measurement and attribution of sediment flows in selected watersheds, the Bank and RGoB agreed to measure the run-off and soil erosion change due to SLM activities. About 50% of the targeted land area identified with severe land 21 National Land Policy 2010, National Forest Policy 2011, Land Act 2007, National Adaptation Program of Action and National Biodiversity Action Plan. 14 degradation issues was managed effectively by project closure, preserving the integrity of a number of key ecosystems. The project reduced annual soil loss by 29MT/ha/year or 44% in the project sites due to management of run-off and soil erosion (target: 10%). The evidence point to the reduction of land degradation in targeted areas, increased agriculture and livestock productivity, reduced damage to households and down slope land and lowered downstream sediment load. 22 The draft report prepared by IFPRI (with Bank support) confirms the significant impacts to sediment loading at the basin level due to SLM techniques in Bhutan. Specifically, country-wide data indicate that SLM reduced sediment load in forest land by 50%, agriculture land by 23% and orchards by 50%. 23 61. In addition to the PDO and GEO results, the following results were achieved. (i) Adoption of SLM techniques – such as establishment of community forests, private forests, water source protection, check dams, bamboo and tree plantations, afforestation, orchards, terracing, hedgerows, stone bunding, and agroforestry – on 7,122 hectares (ha) in pilot geogs and 5,128 ha in scaling up geogs (ii) Improvement of degraded forests and grazing land by 31% (target: 10%) (iii) Conversion of tseri land (shifting cultivation land) into sustainable land cover by 69% (target: 39%) 3.3 Efficiency 62. While the project was extended by another six months, the impacts described above were attained with significant efficiency. The project disbursed the entire grant (see Annex 1) and used 76.9% of the available funds with a variation of +1.3% from the original allocation for piloting and scaling up of SLM practices toward the reduction of land degradation and institutional and community capacity building (Components 1and 2), which represents the main contributors to the PDO and GEO outcomes. An ex-post cost benefit analysis was carried out and it confirmed the positive economic impact and economic feasibility of the project (see Annex 3). The economic calculation yields positive results under two scenarios, i.e., at 5% and 10% discount rates. However, the calculations exclude many other benefits, especially those related to capacity building and mainstreaming of SLM into government policies which generate benefits beyond the communities living in the project sites. 63. Other benefits beyond the project boundaries were achieved, such as the positive impact of SLM on hydropower generation or the sequestration and storage of carbon. SLM also provides important amenity values that are significant for enhancing the nature-based tourism potential of Bhutan. The economic analysis considers these benefits by using the values for ecosystem services reported by Kubiszewski et al. (2013). 24 Because the figures are per capita values and apply only to the population in the project sites, actual benefits are likely to be higher. 22 Sediment load estimation was conducted by modifying the gross soil erosion estimates taking into account the sediment transport and deposition processes from run-off and soil erosion plots and sediment characteristics. 23 Nkonya, E., Srinivasan, R., Anderson, W and Kato, E. 2013 (Draft). Assessing the economic benefits of sustainable land management practices in Bhutan. International Food Policy Research Institute. 24 Kubiszewski, I., R. Costanza, L Dorji, P. Thoennes, K. Tshering. 2013. An Initial Estimate of the Value of Ecosystem Services in Bhutan. Ecosystem Services 3: e11-e21 15 64. Implementation of the activities confirmed the benefits of SLM and point to the possible gains from further scaling up of the project. The analysis applied a conservative approach when approximating economic values and limited the quantification of a few direct benefits to the target population. The results are robust because they underestimate the true economic impact of the project. Due to data constraints, the other economic benefits arising from capacity building and mainstreaming can be considered only in qualitative terms and their positive impact would be felt by land users beyond the project areas in future years. 3.4 Justification of Overall Outcome Rating 65. The overall outcome is rated satisfactory on account of the: (i) high relevance of the project objectives, design and implementation; (ii) achievement of the PDO and GEO with high efficacy; and (iii) significant efficiency. The project outcomes are consistent with Bhutan’s long-term vision and short to medium term development strategy as well as the Bank’s CPS. The relevance of the project outcomes and benefits to communities were confirmed by the high positive responses of the stakeholders interviewed during the ICR mission and the beneficiaries (i.e., from the survey results). Many design elements were subsequently adopted in development planning at the national and decentralized levels and funding agencies. The project’s development and global environmental objectives were achieved despite some operational and technical challenges in the early stages of project implementation. Implementation of the project activities was financially sound, allowing for additional outputs to enhance the overall outcome. The project’s positive economic impact is a testament to the benefits of SLM. 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty impacts, gender aspects, and social development 66. The project generated additional income in targeted as well as non-targeted communities while safeguarding land and land based resources from further degradation. Most of the investments were concentrated in areas of high poverty largely because of their remoteness. For details see Annex 2. In Radhi geog, the bamboo plantations introduced to prevent soil erosion and improve land stability became a source of income for the communities, second only to rice production. Because of bamboo’s high regenerating capacity, the sale of bamboo poles provided over Nu 400,000 in less than three years. Such results drew the interest of farmers and geog administrators beyond the target geogs in adopting SLM. Indeed, NSSC continues to receive proposals to support SLM interventions in non-project geogs. 67. Women participated actively in training and field demonstration exercises with 40% of the participants being female. The project created a conducive environment for female participation in SLM action planning. For example, the project arranged community meetings close to their residences to avoid any long travel avoiding possible disruption to livelihoods. The project beneficiaries included 5,900 females and 9,800 males who participated willingly and recognized the relevance of SLM to their livelihoods. 25 25 There were no targets for the gender distribution of benefits (including levels and types). 16 68. The project was instrumental in reviving the traditional practice of establishing informal labor sharing groups to address the lack of adequate labor in many households. 26 This practice built social cohesion in villages and helped develop community trust and confidence. The demonstration sites created under the project were used to show case good practices to farmers in non-project areas and brought remote rural communities together to learn from and share their experience. The project contributed to inter-community transfer of knowledge, increased dissemination and adoption of SLM practices and reduced isolation, resulting in benefits to an additional 12,737 farmers outside the project sites. (b) Institutional change/strengthening 69. The project attained considerable results vis-à-vis institutional change and strengthening because they were the core elements of the project design as described under section 3.2 (also refer to Annex 2 for details). The sustainable engagement of communities with local level institutions and extension services for agriculture, livestock and forestry was key to the project and satisfactorily achieved through the multi-sectoral planning approach and the resource management regulatory agreements adopted at the local level. The multi-sectoral planning approach strengthened the linkages between RDCs and geogs, RDCs and NSSC and geogs and NSSC. It also led to better coordination among the three key sectoral departments of MoFA as well as other institutions (Hydro-Meteorological Service, National Biodiversity Center and National Land Commission). (c) Other unintended outcome and impacts (positive and negative) 70. The development of DrukDIF and its offshoot, the geographic information system (GIS) were instrumental in opening the dialogue within RGoB on improving the country’s capacity to manage their natural endowment and to respond effectively to disaster risks. Due to the project’s robust capacity building elements, RGoB was able to utilize the GIS expertise and mapping during the recent flood in Bhutan. The Department of Hydro-Meteorological Service secured additional finance to enhance the capabilities of DrukDIF in response to engage more effectively to address river-basin level challenges. 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 71. As part of the preparation of the borrower’s evaluation report, NSSC conducted a beneficiary survey targeted to the project beneficiaries and stakeholders. The study was administered and analyzed by an independent consultant. Over 90% of respondents felt that: (i) the project enhanced the livelihoods of farmers; (ii) SLM interventions lead to positive impact on land resources; and (iii) the training provided was relevant and useful in enhancing knowledge and skills, changing attitudes towards SLM and its adoption. A majority of respondents 26 Historically, people particularly living in rural areas worked in small groups (known as informal labor groups) for activities such as agriculture, livestock management, building small-scale infrastructure, etc. Through time this practice ceased in many parts of Bhutan. With the migration of people to urban centers, there is significant level of labor drain in rural areas. With the reduction of able bodied people to work on land, the communities recognized the importance of reviving the informal labor groups to work efficiently. 17 expressed their confidence that SLM activities will be sustained after project closure. (See Annexes 5 and 6 for details.) 4. Assessment of Risk to Development Outcome 72. Rating: Moderate 73. The risk of reversing or losing the institutional and community capacity for anticipating and managing land degradation is considered low. The project design and implementation succeeded to instill ownership among communities and local administrative officers which is critical for sustaining the development outcome. Currently, there is adequate institutional capacity and community ownership to sustain the SLM investments. Although the project demonstrated SLM best practices in all project geogs, it takes time for farmers to realize the benefits of SLM interventions before they actually adopt and maintain the technologies on their own. Limited additional support may be needed to keep up the momentum and to facilitate the consolidation of ongoing SLM activities in critical sites. Such support would lead to increased attention to the demonstration sites and the reduction of land degradation in the long run. The beneficiary survey results confirm the substantial changes in farming practices in the project areas and the significant willingness and ability of the farmers to continue those practices. 74. The risk of negating the effective protection of transboundary watersheds is assessed to be moderate. While the physical investments were carried out in a limited area, they made a significant contribution to watershed protection by improving land management in land degradation hotspots in Bhutan. By strengthening human and technical capacity, the project built a foundation for understanding the need for watershed protection as well as for knowledge and capital investment in appropriate technology. RGoB’s development strategy espouses the significance of watershed protection especially because of its impact on one of the country’s key economic sectors – hydropower generation. The shared interest of the international community on watersheds raises the possibility of external finance. 75. RGoB has taken a number of initiatives to ensure the sustainability of the project outcomes, including the following: (i) The establishment of the SLM unit demonstrates the country’s ownership of and commitment to the project approach and the considerable likelihood of sustaining the development objectives and achievements. While there is a risk to adequate staffing of the unit for budgetary reasons, it is mitigated by the availability of NSSC staff trained in SLM who can provide their expertise to the unit and continue to integrate SLM in their regular work. In addition, NSSC maintains its linkages with the RDCs that have closer access to the dzongkhags, geogs and chiogs. (ii) The SLM approaches under the project were mainstreamed into other donor-financed projects, such as the: (i) Market Access Growth Intensification Project (US$12.5 million) funded by the International Fund for Agricultural Development and RGoB; (ii) Accelerated Bhutan Socio- Economic Development (US$700,000 annually) funded by RGoB and the European Union (EU); (iii) Remote Rural Communities Development Project supported by the International Development Association (IDA) (US$9 million). 18 (iii) MoAF requested all 205 geogs to make adequate allocations for SLM activities in their annual and five year plans. In the Eleventh Five-Year Plan, RGoB gives priority to the agricultural sector toward increased food production from Bhutan’s available arable land. The plan emphasizes land development and management to mitigate the adverse effects of torrential rain, flash floods, and soil erosion, on their small area of arable land. (iv) RGoB is currently aligning its National Action Program (NAP) to combat desertification with UNCCD’s 10-year strategy. Bhutan may be able to gain access to additional financial assistance for SLM from GEF or UNCCD in the future. The NAP alignment process is underway and is expected to be completed by the end of 2013. 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry 76. Rating: Satisfactory 77. A quality assessment of lending portfolio (QALP) on the project was carried out in October 2008 by reviewers from the Quality Assurance Group (QAG). The team recognized the main strengths of project design – its participatory mechanism, building block system and learning by doing. However, the QAG team thought that little attention was given to watersheds as the centerpiece for planning and implementing interventions towards the achievement of the GEO. Hence, they rated quality at entry as moderately satisfactory. 78. The ICR team rated the Bank's performance in the identification, preparation, and appraisal of the project as satisfactory. During preparation and appraisal, the Bank team fully considered the adequacy of project design and all its major aspects – technical, financial, economic and institutional – as well as procurement, financial management and safeguards. A number of design alternatives were considered. Because of the limited experience in implementing similar projects in Bhutan, 27 the pilot and scaling up approaches gave space for learning and adaptive management decisions. The lack of experience with the project approaches justified the lengthy preparation. The participation of the communities and local officials ensured that the design would be acceptable to the project beneficiaries. Hence, it was necessary to spend a lot of time interacting and consulting with the communities in the project sites. Resources were insufficient to collect data for all elements and variants necessary to calculate sedimentation at the watershed level. In view of the challenges related to country size, remoteness and capacity, the attention paid to achieving the GEO by measuring the reduction of runoff and soil loss was adequate and realistic. The team did not lose sight of the need for better watershed management as the country’s capacity in terms of technology and knowledge increased. 27 There were no community-driven development projects financed by the Bank in Bhutan from which lessons could be drawn to address the implementation challenges. The only Bank-financed project that was in place at the time of project preparation was the Bhutan Decentralized Rural Development Project (approved in 2005) which focused on rural access and irrigation. While the latter informed the project design, many approaches applied under the project were not relevant or applicable to SLMP. 19 79. Project preparation was carried out with a sufficient number of specialists who provided the technical skill mix necessary to address sector issues and develop the project design. The Bank provided adequate resources – staff time and funding – to ensure the quality of preparation and appraisal. The team recognized the importance of consistency with the CAS and government priorities in the sector. The Bank maintained a consistently good working relationship with the Borrower and its institutions during preparation and appraisal. (b) Quality of Supervision 80. Rating: Satisfactory 81. The QAG team rated Bank supervision as satisfactory vis-à-vis development effectiveness, supervision inputs and processes as well as candor and realism of the Implementation Status Reports (ISR). The reviewers found that implementation was generally proceeding well at the time of their assessment. Some initial problems with procurement, monitoring and reporting were resolved and the ongoing issue with flow of funds to project localities was addressed. The supervision team was adequate because of the strong participation of procurement and financial management specialists as well as environment and social specialists from the Delhi and Washington offices. Some team members were involved in other activities in Bhutan, allowing for economies of scale and solid knowledge of the country conditions. QAG felt that the task team gave priority to developing the institutional capacity and mechanisms required for SLM at both the community and national levels. The QAG report stated that the project’s systems for budgeting, fund flows, internal control, accounting, reporting, and audit were generally adequate for mitigating any risk of fraud and corruption. 82. The ICR team rated project implementation of the project as satisfactory. The supervision skill mix was appropriate for a project of this nature since it included technical, environmental, social development, procurement, and financial management specialists. The supervision team provided adequate direction to the client toward the achievement of the PDO. Sufficient budget and staff resources were made available for supervision. The task team alerted RGoB and NSSC about issues that emerged during implementation and facilitated prompt corrective action. The ISR ratings on achievement of the PDO and GEO and implementation progress were realistic. 83. The Bank’s procurement and financial management staff worked regularly with NSSC staff to explain the applicable fiduciary policies and procedures. The recommendations of the MTR of September 2008 were implemented and led to improved project performance. Although the task team monitored safeguard compliance, the team did not include a Social Development Specialist in the latter part of the project for budget reasons. 84. The Bank’s counterparts acknowledged the quality of the overall implementation support provided by the task team and the extent of Bank support toward meeting the project objectives. On the other hand, the client felt that the Bank could have provided better support on the fiduciary aspects in the early stages of implementation. Also, the quality of the Bank’s 20 engagement could have been more effective if the task team had participated in field monitoring to guide local level implementation. (c) Justification of Rating for Overall Bank Performance 85. Rating: Satisfactory 86. In view of the satisfactory rating for quality at entry and of supervision, overall Bank performance is rated as Satisfactory in accordance with the Independent Evaluation Group’s (IEG) harmonized rating criteria. 5.2 Borrower Performance (a) Government Performance 87. Rating: Satisfactory 88. As mentioned in Section 2.1, RGoB demonstrated its commitment to the objectives of the project starting with preparation. That commitment was maintained throughout implementation as demonstrated by the quality of the government’s performance. RGoB responded effectively and promptly to resolve issues as and when they arose. RGoB officials worked closely and regularly with the Bank's project team. Their performance was satisfactory because of the dedication and strong technical capacity of the project management team (PMT). In addition, a field coordinator was assigned in each of the three dzongkhags. There were no problems with the allocation of financial resources to the project although there were some difficulties with the timely flow of funds to the pilot geogs in the early stages of implementation (described and justified earlier) that were subsequently resolved. 89. MoAF played an active role in project implementation by providing policy guidance to the PMT. The relevant Ministries, departments and NSSC coordinated and consulted with each other systematically. Appropriate levels of review and approval were in place and the review processes were timely. Financial accountability and follow-up were observed, expenditures were duly authorized before they were incurred and documentation was maintained properly for periodic review. (b) Implementing Agency or Agencies Performance 90. Rating: Satisfactory 91. NSSC consistently demonstrated its commitment to implementation and resolution of issues. Fiduciary performance was mixed. Financial management was initially rated as moderately unsatisfactory because of the delay in the fund flows. On the other hand, the project was designed to be flexible and allow for learning and improvements. The cause of the delay was resolved and, during the project’s last four years, financial management was rated as satisfactory. The submissions of the quarterly Interim Unaudited Financial Reports were timely. The flow of funds between the Designated Advance Account and the PMT was satisfactory. There were no reports of any delays in fund releases or shortfalls. On the other hand, 21 procurement compliance was inconsistent due to poor management of procurement records. However, the procurement post reviews did not find any significant deviations from agreed procedures or lack of necessary documentation. 92. The PMT at NSSC was effective in performing project management, safeguards compliance, M&E and reporting. NSSC regularly monitored the results framework and updated and shared the results monitoring matrix with the Bank. The PMT conducted regular monitoring visits to the project geogs and achievements were well documented through posters, brochures, workshop reports, manuals, etc. NSSC submitted all required quarterly and annual reports in a timely manner. The reports provided valuable feedback on the project’s progress and served as useful inputs to Bank supervision missions. (c) Justification of Rating for Overall Borrower Performance 93. Rating: Satisfactory 94. With satisfactory ratings for Government performance and NSSC performance, overall borrower performance is rated satisfactory in accordance with IEG’s harmonized rating criteria. At the time of project closure, the Borrower had complied with all agreed grant requirements toward the PDO and GEO achievement. 6. Lessons Learned 95. A simple and flexible project design is important for a country with limited resources and prior experience that was still developing its approach to address a national priority. Such a design recognizes the need for allowing sufficient time for capacity building to become fruitful and for the implementing agencies to take on increasingly complex activities at the right time. It is adaptive to the changing needs of beneficiaries and decision-makers. Learning by doing or piloting during the early stages of the project in a new area of intervention is critical to building the knowledge and expertise of the project team, local officials and the communities prior to scaling up the project in a larger geographical area. 96. The multi-sectoral approach adopted by the project proved to be an effective means of managing natural resources. The wellbeing of the environment and natural resources is fundamental to the long-term sustainability of many sectors. Hence, bringing practitioners from various sectors together, creating and enhancing synergies, promoting collective processes and encouraging adaptation to joint decision-making are basis to the project’s success. The appointment of a multi-sectoral technical advisory team centrally ensures that the technical knowledge for implementing project activities is consolidated and made available to field level staff to build strong ownership of the project among stakeholders. Collaboration among relevant ministries and agencies, as well as with other donor agencies on sectoral, as well as cross- sectoral issues can help address them expeditiously. The synergy created by this collaboration and cooperation enables the government to carry out related policy changes more effectively. 97. Providing short-term livelihood incentives to communities facilitated the effective adoption of natural resource management practices. For a project where the activities are 22 labor-intensive and most of the impacts are long-term, providing short-term livelihood incentives raises the willingness of communities to adopt new techniques and ease the burden on the most vulnerable groups. When the benefits are realized, the need to continue with the short-term incentives diminishes substantially. Training and awareness raising and developing clear linkages to livelihood outcomes enable community understanding of the significance of the project interventions. Close and continued interaction with the communities for a considerable amount of time helps to change their attitudes and behaviors towards the adoption of new technologies with long-term benefits. 98. The use of existing institutional structures for project implementation instead of creating a separate project management unit is effective when implementing institutional capacity building projects. The approach encourages institutional enhancements after the project closure and instills project ownership within the country. Disruptions to project implementation would need to be minimized by limiting the turnover of key project staff. To ensure continuity, key staff should be appointed for the entire project period. When this is not possible, the availability of proper documentation and handover arrangements (including overlap between incoming and outgoing staff) must accompany staff changes for the continuation of systems, procedures and documentation. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies 99. Comments were requested from Secretary of MoFA, Director General of Department of Agriculture, Director General of Department of Public Accounts and Secretary of GNHC. 100. There were no specific comments for the draft ICR from the Secretary of MoFA, Director General of Department of Agriculture and GNHC. Few minor comments were shared by the Program Officer for the World Bank Projects in Bhutan on behalf of the Department of Public Accounts correcting a reference to an on-going project and providing two suggestions for NSSC (refer to Annex 7 for details). Further, MoAF considered that this project was one of the most successful projects implemented by MoAF so far. It was indicated that MoAF and Department of Agriculture are fully committed to scaling up or replicating the good lessons and experiences gained through the project to other parts of the country and possibility of getting this done is being explored quite vigorously. Appreciation were also provided to the World Bank for its support in getting the project successfully implemented and ICR team for evaluating the project positively encouraging RGoB to take forward SLM. (b) Cofinanciers The DANIDA representative in Bhutan was approached for comments on SLMP and the response was that no specific comments for the report. (c) Other partners and stakeholders 101. Not applicable. 23 Annex 1. Project Costs and Financing • Project Cost by Component Appraisal Actual /Latest Percentage of Components Estimate 28 Estimate 29 Appraisal (US$ million) (US$ million) 1. Pilot projects to 1.37 1.470 107.3% demonstrate effective (Nu. 66.014 application of land million) degradation prevention approaches 2. Mainstreaming of practices 4.41 4.711 106.8% for protection against land (Nu. 211.547 degradation million) 3. Policy support and 1.05 0.735 70% guidance for mainstreaming (Nu. 33.013 land degradation prevention million) practices 4. National level support for 0.81 1.119 138.15% coordination of (Nu. 50.263 implementation of land million) degradation prevention practices 7.664 8.035 Total Financing Required (Nu. 360.836 million) 28 The total baseline cost given in the cost table in Annex 5 of the PAD is incorrect where the total should be US$ 6.348 million, but shown as US$ 6.328 million. There is also a US$ 0.024 million difference between the total of the component costs (US$ 7.64 million) shown as appraisal estimates above including physical and price contingencies (Annex 4 of the PAD), which is different to actual total financing (USD 7.664 million). Therefore, the percentage of appraisal above has not accounted for the US$ 0.024 million, which cannot be reconciled at this point. 29 Actual/latest estimate appears high as compared to the appraisal estimate. This is because of the varying exchange rates. Here we have used 2005 exchange rate (Nu. 44.91 = 1 US$), whereas it has varied so much over the years and the last exchange rate before the project came to end, i.e. as of June 29, 2013 was Nu. 59.30 = 1 US$. As a result there was extra Ngultrum (Nu) to spend. 24 • Co-financing Appraisal Actual/Latest Percentage of Source of Funds Type of Financing Estimate Estimate Appraisal (US$ million) (US$ million) GEF 7.66 8.035 104.89% Borrower/Recipient 1.51 1.510 100% Local Communities WB-administered 0.95 1.350 142.11% TF (Nu. 60.645 m) DANIDA: Danish Parallel financing 5.77 5.770 100% International Assistance 25 Annex 2. Outputs by Component Component I: Pilot projects to demonstrate effective application of land degradation prevention approaches. Key Outputs 1. Development of GIS-based analytical tools, tracking SLM, identifying land degradation hot-spots and prioritizing SLM investments. The following outputs improved the natural resources and sustainable land management planning and prioritizing investments both at local and national levels. • The GIS Section within the NSSC strengthened with well-trained personnel and latest technology in terms of equipment and tools. • A SLM Action Planning Manual prepared in 2009. • 50 renewable natural resource maps prepared, employing GIS analytical tools, which include the resource assessments and socio-economic profiles with full participation of chiogs. • National land cover maps updated in 2010. 2. Improvement of income of local farmers and agricultural productivity gains. There were interventions that were successful in generating cash and improving the livelihood of the communities. Smart agriculture practices such as terracing, stone bunding, agro-forestry, farmer-groups, improved farm yard manure, orchard development and water source protection significantly benefitted farmers in the project areas. Other equally important interventions such as irrigation channel renovation, monetary incentives, bamboo plantations, community forests, fodder base improvement and poultry farms also resulted in gains. Livelihood outputs and related achievements due to project were as following: • Growing a variety of vegetables such as cabbage, broccoli, beans, etc. in a kitchen garden (tshesa) reduced dependence on non-wood forest products, and diversified the household diet. • Cultivation of potatoes as cash crop was significant for livelihoods of the communities. Farm yard manure (FYM) / dairy sheds and improvement of agriculture land provided direct socio-economic impact. • FYM/dairy sheds, stone bunding and citrus orchards were aimed at long-term impact that will lead to structural and physical improvement of land. In addition, they will not depend on continued short-term inputs other than maintenance. • FYM sheds (1,555 numbers) resulted in better cash income from the sale of milk, butter and cheese, through improved animal production due to better fodder availability and improved sheds. In addition, 16 breeding bulls were supplied to the farmers. Besides the cash, the workload of farmers was reduced with the improved fodder availability that replaced the cumbersome fodder collection from the forest. • Cultivation of ginger (cash crop) was an important source of cash income for the communities of Phuentsholing, Logchina and Bongo geogs, under the Chhukha district. 26 In combination with structural and vegetative SLM interventions such as hedgerows, stone bunding and bench terracing on very steep slope sections, ginger cultivation proved more sustainable. • Improved varieties of staple crops such as maize, paddy and wheat greatly contributed to better yields. Especially in remote communities like Goshing, seed quality was mentioned as a major issue for land users and supply of better seeds clearly benefited the households involved. • The project provided 48 post-harvest machineries and 914 sets of agricultural tools to reduce post-harvest loss of produce and to increase the efficiency of farming without compromising the sustainability of the land. • The project supported the improvement of 83km of irrigation channels. Larger areas of paddy were irrigated with higher yield as planting was carried out on time. • Bamboo plantations developed to an important income source in geogs where bamboo was a key intervention, such as in Radhi. Bamboo is now listed second highest income source after paddy (the traditional key income source) bringing down bhurra weaving to third place. • 165 poultry and piggery enterprises were set up by the project. Small-scale poultry enterprises aimed at the production of eggs was a relatively new activity for income generation. A number of groups were formed to collectively manage a poultry enterprise as well as marketing of products. • A beekeeping group was formed in Logchina geog in the Chhukha district to promote improved beekeeping practices with modern wooden beehive boxes, which facilitated practical and hygienic management. A total of 1,404 improved beehive boxes were provided by the project. An agreement was made with a private firm, Bio Bhutan to buy the honey. The table below provides the income per farmer due to improved production as a result of managing land degradation. Table 2.1 Aggregate cash income generated by a farmer in 2012 (adapted from the borrower evaluation, 2013) Geog Income generating activity Amount (Nu.) Vegetable 8,103 Bongo Dairy 1,396 Vegetable 2,412 Poultry 6,470 Dairy 2,630 Piggery 4,538 Goshing Napier 663 Fruits 1,325 Bamboo 100 Vegetable 7,208 Nangkor Poultry 1,939 Dairy 3,750 Radhi Vegetable 4,066 27 Dairy 888 Bamboo 1,111 Vegetable 3,083 Poultry 388 Lumang Dairy 3,222 Piggery 1,111 Napier 655 3. Improvement of vulnerable land. During the project period a total of 2,010.6 acres of vulnerable land was improved through various sustainable land management interventions. These are the establishment of community forests and private forests, water source protection, check dams, bamboo and tree plantations, afforestation, and legume cropping. Table 2.2 Overview of acreage of vulnerable land improved in pilot geogs CF & PF Water Afforestati Legume LMC + Total Geog establishm source Grazing on cropping SALT (Acres) ent protection Phuntsholing 278.0 14.0 74.9 96.9 173.3 11.5 648.5 Nangkor 741.0 4.0 3.8 26.4 0.0 0.0 775.1 Radhi 319.5 1.3 196.0 15.2 33.0 22.0 587.0 Total 1,338.5 19.30 274.7 138.5 206.3 33.5 2,010.6 Source: Compilation by SLMP, NSSC. 4. Conversion of ex-Tseri Khamzhing lands to sustainable land use. During the project period, a total of 2,475.2 acres of ex-tseri land was converted to more sustainable land use through establishment of orchards, terracing, hedgerows, stone bunding, fodder tree plantation and agroforestry. Table 2.3 Overview of the acreage of ex-tseri land converted to sustainable use in pilot geogs Dry land Wet land Stone Agro- Annual Geog Hedgerows Orchards Total terracing terracing bunds forestry crops Phuntsholing 132.0 9.0 177.0 157.0 44.7 279.4 647.2 1,446.2 Nangkor 6.5 139.2 132.0 33.0 13.0 525.9 179.4 1,029.0 Total 138.5 148.2 309.0 190.0 57.7 805.3 826.6 2,475.2 Source: Compilation by SLMP, NSSC. Achievement of results Indicator Target Achievement at completion (i) Number of farmers 650 (pilot geogs) 1,805 (pilot geogs) practicing SLM techniques (ii) Area of degraded forest land 666 acres (pilot geogs) 2,011 acres (pilot geogs) 28 regenerated and grazing land improved in pilot geogs (iii) Area of ex-tseri land 4,000 acres (pilot and scaled-up 2,475 acres (pilot geogs) converted to sustainable land geogs) cover Component II. Mainstreaming of practices for protection against land degradation. Key Outputs 1. Scaling up of SLM practices in new geogs. Activities such as natural resource surveying and mapping and training of dzongkhag and geog officials were undertaken as part of the initial ground preparation. Natural resource maps were prepared for all 88 chiogs. Scale up practices were implemented in the 6 additional geogs by further incorporating SLM activities in the annual plans. Another 23 geogs outside the project areas also undertook SLM practices with the project support. A total of 6,435 acres of vulnerable land improved and 5,082 acres of ex-tseri land converted to sustainable use (please refer to table 2.4 and 2.5 for details). Table 2.4 Overview of acreage of vulnerable land improved for scaled up geogs CF & PF Water Afforestati Legume LMC + Total Geog establishm source Grazing on cropping SALT (Acres) ent protection Bongo 804.0 4.0 143.0 62.8 36.3 0.0 1,050.0 Logchina 881.0 8.0 111.3 0.0 92.1 0.0 1,092.4 Bardo 1,009.0 4.0 9.3 22.0 26.7 0.0 1,070.9 Goshing 787.0 3.5 19.5 55.8 16.5 0.0 882.3 Lumang 1,589.1 20.0 241.6 92.6 70.3 16.3 2,029.8 Thrimshing 45.2 13.6 159.0 9.1 18.8 2.0 247.6 Others 0.0 2.5 0.0 0.0 0.0 59.2 61.7 Total 5,115.3 55.6 683.7 242.3 260.7 77.5 6,434.7 Source: Compilation by SLMP, NSSC. Table 2.5 Overview of the acreage of ex-tseri land converted to sustainable use for scaled up geogs Dry land Wet land Stone Agro- Annual Geog Hedgerows Orchards Total terracing terracing bunds forestry crops Bongo 32.5 9.1 6.5 48.5 29.1 150.0 315.3 590.9 Logchina 11.0 7.5 92.7 349.1 6.5 0.8 413.9 881.5 Bardo 22.0 49.0 128.0 168.0 9.9 309.0 145.3 831.2 Goshing 117.0 9.5 493.0 91.5 6.0 368.7 58.3 1,144.0 Lumang 0.0 0.0 620.6 56.0 14.9 333.9 609.1 1,634.5 29 Total 182.5 75.1 1,340.8 713.1 66.4 1,162.4 1,541.9 5,082.1 Source: Compilation by SLMP, NSSC. 2. Resolving inter- and intra-dzongkhag conflicts over resource use. The project actively supported in addressing forest use issues in collaboration with the National Land Commission and the rangeland management issues in partnership with Social Forestry Division of the Ministry of Agriculture and Forests. The rangeland management study contributed to documentation of conflicts 30 with special reference to the Sheytemi conflict in Radhi geog. Further, trainings and seminars were organized on conflict management and effective practices and appreciation on preventing land degradation measures to the geog and dzongkhag staff. Resource use conflict management at the local level was put in place for all project sites. The policy changes and local level regulatory agreements helped to reduce the number of conflicts. In addition, the project created a forum for the community members to discuss issues with the assistance of local authorities and extension staff. By final year of the project, except for minor issues there were no significant conflicts among the resource users. 3. Awareness and capacity building of staff and farmers in sustainable land management. The project was successful in building both institutional and human resource capacity at different levels of the government. The project sponsored 9 Masters Degrees and 7 Post Graduate Diplomas. As shown in Table 2.6, 64 short-term trainings were undertaken and 223 study tours were conducted for a total of 1,012 beneficiaries. Farmer training both in-country and out of Bhutan, benefitted 17,237. As part of institutional strengthening and coordination among stakeholders, annual review workshops were conducted every year attended by the World Bank Mission team, SLMP MTAC members, PMT members, representatives from the research and development centers, Dzongkhag planning officers and RNR sector heads of three pilot dzongkhags, extension agents from scale up and pilot geogs and field coordinators. Table 2.6 Training of RNR officials and farmers during 2007-2013 Category No. of beneficiaries Masters 9 PG Diploma 7 Short term training 64 Study tour 223 Seminar/Conference/Workshop 14 Total ex-country 317 Total in-country training 763 Farmers training 16,448 Farmers study tour 789 Total farmers trained 17,237 Source: Compilation from SLMP, NSSC. 30 The conflicts were mainly due to resource use such as how much to extract, who can extract, etc. by different individuals and communities due to lack of policy guidance and regulations. 30 Achievement of results Indicator Target Achievement at completion (i) Number of geogs effectively +9 +9 adopting land degradation prevention practices (ii) Number of farmers - 1,341 practicing SLM techniques (iii) Area of degraded forest land 6,434.7 acres regenerated and grazing land improved in pilot geogs (iv) Area of ex-tseri land 5,082.1 acres converted to sustainable land cover (v) Number of inter- and intra 10 No serious complaints reported dzongkhag and geog during the final year as a result of conflicts over grazing and local level resource management forest use resolved agreements and land use policy changes in place (vi) 80% of RNR staff, +80% Average 93% (RNR staff – 88%; Dzongkhag Yargye GYT members – 90%; DYT Tshodu (DYT) and Geog members – 100%) Yargye Tshogchung (GYT) members in pilot geogs trained in multi- sectoral SLM approaches (vii) 50% of farmers trained 50% Over 100% in application of SLM About 4,500 farmers of 9 project 17,237 farmers (9 project geogs technologies geogs and other geogs) Component III. Policy support and guidance for mainstreaming of land degradation prevention practices. Key Outputs 1. Including SLM planning guidelines in the Tenth Five-Year Plan and Eleventh Five-Year Plan: PMT and MTAC brought lessons learnt and feedback from geog level to central level through discussions during the preparation of Tenth Five-Year Plan and then subsequently incorporated them in the geog plans. RNR Five-Year Plan included a national program for SLM for most geogs. The “one geog three products” plans adopted as a core activity in the Tenth Five-Year Plan also included SLM activities. The SLM content in the Tenth Five-Year Plan was stronger than the Ninth Five-Year Plan with SLM targeted programs and activities. The Eleventh Five-Year Plan (2013-2018) integrated SLM approaches in different sectors 31 and administrative levels. SLM activities were included in the NAP which required the project activities to align with UNCCD 10-year strategy. Likewise, the Remote Rural Communities Development Project within the Policy and Planning Division of MoAF also included components on SLM activities, further contributing to land degradation prevention. The land management campaigns continued as part of the regular agriculture development interventions across the country and were conducted annually thus helping in mainstreaming of SLM beyond the project sites. 2. Including SLM planning processes and components in the nine target geogs: Nine geogs, three from each of Zhemgang, Chhukha, and Trashigang dzongkhag incorporated SLM action planning processes into their annual development planning processes. The project introduced comprehensive planning approaches with a range of tools originating from Participatory Rural Appraisal and Participatory Learning and Action such as problem census, history lines and participatory mapping. This approach with its illustrative character and consultative nature empowered grassroots level communities. Even those considered illiterate actively engaged in this approach. 3. Sectoral level policies incorporating SLM principles: SLMP principles were significantly incorporated into policy and legal reforms through the revised Land Act of Bhutan 2007, National Land Policy 2010 and National Forest Policy of Bhutan 2011. The Land Act of Bhutan 2007 contains several revised clauses relevant to sustainable land management. A review of government policies and plans in Bhutan relating to sustainable land management were carried out and published. SLM principles were integrated into the national development and environmental framework via the National Capacity Self-Assessment, the National Adaptation Program of Action and the National Biodiversity Action Plan. 4. Local level resource management system adopting SLM outcomes: Formulating at least 10 local level resource management regulatory agreements for geogs and local communities for SLM outcomes was the first target under this initiative. At project closure, a total of 140 local level resource management regulatory agreements were put in place. This included the establishment and certification of community forests, as well as community concurrence and agreements with water user associations and by-laws for the water source protection. Achievement of results Indicator Target Achievement at completion (i) SLM planning guidelines Tenth and Eleventh Five-Year Tenth and Eleventh Five-Year included in Tenth and Plans with SLM Plans with SLM Eleventh Five-Year Plans (ii) At least 9 target geogs and 9 9 dzongkhags annual development planning processes incorporating SLM (iii) At least 5 revised sector 5 5 policies and legislation 32 incorporating SLM principles (iv) At least 10 local level 10 140 resource management regulatory agreements formulated for geogs and local communities for SLM outcomes Component IV. National level support for coordination of implementation of land degradation prevention practices Key Outputs 1. Sector agency annual plans incorporating SLM: Various activities were undertaken such as the Livelihood Analysis Survey for the scaling-up geogs and the development of the Land Bill of Bhutan 2007. The project supported geog planning and implementation of the Land Cover Mapping Project, which started in 2008 and completed in 2010. Maps of geogs, dzongkhag and national atlases were printed. These were widely distributed, used by all agencies for planning and used for informed decision making. The project also supported the development of the Land Policy document ensuring proper management and administration of limited arable land and the pristine environment of the country. 2. Developing a system for data modeling and management for natural resource management and decision making. The project with the technical assistance of data management and modeling experts from the University of Washington supported the development of DrukDIF to organize, store and make accessible natural resources management data from the project sites. It is a valuable tool to facilitate informed decision-making on natural resource use and trade-offs and could facilitate policy and planning for natural resource management. In addition, the DrukDIF was linked to a spatially disaggregated (distributed) hydrological model to permit the data to be used for land cover and land use change projections as well as to assess the likely impacts of climate change on agriculture and natural resource dynamics. 3. NSC and MTAC to support planning and mainstreaming multi-sectoral SLM approaches: The project gained an excellent reputation among various stakeholders for its unique feature of using a multi-sectoral approach that caters to integrated farming needs of communities. SLM interventions holistically cover all three RNR sectors of agriculture, livestock and forestry. NSC and MTAC guided and advised the PMT and field officers on project delivery and technical issues through meetings, workshops, seminars and field visits. 4. Making the project structure functional: The six-year project exhibited exemplary functional and administrative benchmarks and achievements with the multi-sectoral advisory committee and the National steering committee as management heads. Fund transfer at the initial years of the project was directly from the center to the project field coordinators and later disbursed through the Gup’s 31 office. Additional funds were sent based on completion reports 31 Gup: Head of a Geog and Chairman of the Geog Yargye Tshogchung (Block Development Committee) 33 incorporating expenditure and project activity reports. Disbursements followed regular government norms by adhering to existing geog and dzongkhag administration rules, regulations and guidelines. Effective monitoring and evaluation procedures were in place with geog SLM planning teams (GSPTs) submitting progress reports and keeping all administration levels informed. The SLM activities beginning with GIS-based maps identifying “hotspots” that need urgent land degradation preventive practices were well adopted and appreciated by farmers in the project geogs. SLM manuals and digitization were completed. These facilitated the planning and implementation process. The unique SLM feature incorporating a multi-sectoral approach helped mainstream land concerns in the main planning process. Further, the phase-wise approach starting with pilot, scaled up and other SLM activities benefitted all stakeholders with planning capabilities, opportunities to share lessons learnt and equitable distribution of benefits. All nine geogs received formidable support, proving the proper functioning of the project. 5. Fully functional and well-defined financial, monitoring and information management system in place: A simple, but informative M&E system was used to monitor project performance and capture achievements. The GSPTs communicated information through the quarterly project activity progress reports aligned with the GNHC PLAMS. In addition, the GSPTs also carried out participatory monitoring and evaluation and its learning and experiences were used in improving the plan. 34 Annex 3. Economic and Financial Analysis Scope of Economic Analysis and Data Sources The scope of the economic analysis was defined by the project boundaries, i.e. the beneficiaries and land area directly reached by the project, even though it was acknowledged that economic benefits were generated well beyond this boundary. With this conservative approach the economic analysis represents only a lower bound estimate for the total economic benefits generated by the project. Therefore, it increases the robustness of the quantitative analysis as several benefits are excluded, but could potentially be added. Where data was not readily available for the project site, comparable data from other sites or studies was used and is indicated accordingly. While the economic analysis carried out at PAD stage only included economic benefits resulting from slowing the rate of deforestation, this economic analysis included two separate benefit estimations: income improvements by local farmers and ecosystem service enhancements. Further, the quantitative assessment only considers benefits where numerical data can be obtained for the project sites. Economic benefits derived through, for example, capacity building and mainstreaming of SLM in overall policies was included as the quantification of such benefits would be rather difficult. The quantitative analysis of SLM benefits was built on a variety of data sources. Economic parameters of rural farm households were obtained from the Bhutan Living Standard Survey 2012 and parameters of the project beneficiaries were provided from borrowers’ independent evaluation. It was noted that the project reached more beneficiaries than originally anticipated, which in itself is already noted as a great success. The annual economic benefits of ecosystem service enhancements were approximated on a per capital basis. Using the total annual economic value provided by Kubiszewski et al. (2013)32 estimated an annual economic value per capita of ecosystem services of USD 10,400. Increment assumption compared to the without project scenario of 1%, 2%, and 5% was applied assuming that the adoption of SLM would lead to incremental increases of 1%, 2%, and 5%. This was only a partial estimate that leaves out many other sources of benefits to the people, including social and cultural values. It also excluded the provision of goods as these were calculated separately as increases in crop yields. Estimating yield increases due to the adoption of SLM practices is a key parameter for simulating the economic impacts of the project. However, as such data was not available for the project site and data from other studies had to be used. A global review of SLM literature conducted by Branca et al. (2013) 33 indicated that the adoption of sustainable land management 32 Kubiszewski, I., R. Costanza, L Dorji, P. Thoennes, K. Tshering. 2013. An Initial Estimate of the Value of Ecosystem Services in Bhutan. Ecosystem Services 3: e11-e21 33 Branca, G., Lipper, L., McCarthy, N., Jolejole, M.C. 2013. Food security, climate change, and sustainable land management. A review. Agron. Sustain. Dev. (2013) 33:635–650. 35 generally leads to increased yields, although the magnitude and variability of results varies by specific practice. Yield effects can vary and in some cases negative for improved fallows, terraces, minimum tillage, and live fences. Cover crops, organic fertilizer, mulching, and water harvesting were found to have consistently positive yield effects. Rainfall distribution is a key determinant of the yield effects of sustainable land management adoption, and the yield results are generally found to be higher in areas of low and variable rainfall. Isolating the yield effects of individual practices is complicated by the adoption of combinations or “packages” of sustainable land management practices. UNCCD (2009) 34 estimated that 16% reduction of global yields can be attributed to soil degradation and water scarcity. Nkonya et al. (2011) 35 estimated yield losses due to salinity of soils to be around 22% for India and Peru. For Peru, the same source suggests a decrease of maize yields of about 2% due to soil erosion on sloped lands. Consequently with accounting for the complex structure of multiple benefits of SLM affecting yields, the simulation of costs and benefits will consider yield increases of 5% and 10% for crops only. Other parameters assumed for the cost-benefit analysis were the discount rate and simulation period for the analysis. To account for the sensitivity of simulation results to the choice of the discount rate, rates of 5%, 10%, and 20% were chosen. In line with the economic analysis carried out at PAD stage, a 20-year time horizon was used for the simulation. Table 3.1 provides a quick summary of all parameters used for the analysis. Project costs were approximated using the investment costs of the project totaling USD7.66 million. According to the disbursement progress anticipated by the project team, total costs were distributed as follows: USD 0.25 million (year 1), USD 1.08 million (year 2), USD 1.24 million (year 3), USD 1.14 million (year 4), USD 1.50 million (year 5), USD 1.43 million (year 6) and USD 1.01 (year 7). Table 3.1 Parameters used for simulation of economic analysis Parameter Value Source Remarks Households 4,552 ICR Mission Land area 17,618 acres ICR Mission Target was 14,161 acres Incremental yield Approximation with sensitivity 5% and 10% Literature review increases analysis Incremental ecosystem Kubiszewski et al. Percentage increment of annual 2% and 5% service benefits (2013) value estimated at USD10,400 Assumptions (10% Discount rate 5%, 10%, 20% Sensitivity analysis standard) Time horizon 20 years As in PAD Distributed over years 1-7 of Project costs USD 7.66 million As in PAD simulation period 34 UNCCD 2011, Benefits of Sustainable Land Management. 15 pp. http://www.unccd.int/Lists/SiteDocumentLibrary/Publications/CSD_Benefits_of_Sustainable_Land_Management%20.pdf 35 Nkonya, E., Gerber, N, von Braun, J. and De Pinto, A. 2011. The Economic of Land Degradation. The costs of action versus inaction. IFPRI (International Food Policy Research Institute) Issue Brief 68, September 2011. 8pp 36 Cost Benefit Analysis (CBA) was applied for this benefit assessment. CBA provides a set of procedures for comparing benefits and costs and is traditionally associated with government intervention and with the evaluation of government action and government projects. The underlying rationale for CBA is rational choice, i.e. a rational agent will weigh up the costs and benefits of any proposed activity and will only undertake the activity if the benefits exceed the costs. CBA must include all the costs and all the benefits to whomsoever accruing. Thus, the definition instructs that whether the costs or benefits are marketed or not, makes no difference. In other words, even if some of the costs or benefits are not exchanged in markets at all, hence do not have a price, they may still be of value. This provides the basis for the inclusion of environmental and wider social impacts in cost-benefit analyses of energy projects and policies. In many cases, the costs and benefits of a project or policy will arise at different points in time. This provides the basis for a technique known as ‘discounting’ which allows future costs and benefits to be compared with those in the present. Economic indicators that were used for this analysis are Net-Present Value (NPV) and Benefit-Cost Ratio (B/C-Ratio). The consideration of the With and Without project situation is important in CBA. For example, a slowing but continuation of soil erosion is a benefit that can be quantified by the amount of incremental yield that is not lost compared to the without project situation. Likewise, if household incomes can remain stable under a project situation compared to a possible negative trend due to declining agricultural productivity, climate change and other possible impact factors, this also represents an incremental benefit achieved by the project. The incremental change between with and without situation was estimated as a percentage difference of the baseline. Results Income data provided by the BLSS 2012 was used to approximate increases in income triggered by yield increases that were due to the adoption of SLM practices. The data is depicted in Table 3.2. Income from cereal, fruit and vegetables makes up about 17% of the average rural household income in Bhutan amounting to about USD 350 annually. Table 3.2 Annual rural household income differentiated by income source (Source: BLSS 2012) Cash In-Kind Total Ngultrum Ngultrum Ngultrum UISD* [%] Wages and salaries 48,281 415 48,696 974 46.8% Cereal, fruits, and vegetables 16,847 665 17,511 350 16.8% Meat, dairy products, and eggs 5,839 254 6,093 122 5.9% Forest wood and non-wood products 862 14 876 18 0.8% Pottery and weaving 2,074 37 2,111 42 2.0% Remittances received 2,777 263 3,041 61 2.9% Pensions, inheritance, donations received, scholarships 1,088 384 1,472 29 1.4% Real estate deals, sale of assets, and others 1,316 145 13,305 266 12.8% 37 Net income from business 10,949 36 10,985 220 10.6% Total income 101,876 2,215 104,091 2,082 100.0% *An exchange rate of 1/50 is assumed. The simulation results confirmed the positive economic impact of the project for most of the parameter combinations. The economic calculation yielded a negative result only for the high discount rate scenario (20%) and low incremental benefits of ecosystem service provision under the project situation (2% incremental increase). However, this still excluded many benefits, especially those related to capacity building and mainstreaming of SLM into government policies which would achieve benefits beyond the target population of the project. Tables 3.3, 3.4 and 3.5 summarize the simulation results. Table 3.3 NPV and B/C-Ratio at 5% discount rate Incremental ecosystem benefits 2% 5% Incremental yield increase NPV B/C-Ratio NPV B/C-Ratio 5% 3,893,862 1.63 17,840,832 3.88 10% 4,676,635 1.76 18,623,605 4.01 Table 3.4 NPV and B/C-Ratio at 10% discount rate Incremental ecosystem benefits 2% 5% Incremental yield increase NPV B/C-Ratio NPV B/C-Ratio 5% 1,239,567 1.24 9,992,485 2.96 10% 1,730,824 1.34 10,483,743 3.06 Table 3.5 NPV and B/C-Ratio at 20% discount rate Incremental ecosystem benefits 2% 5% Incremental yield increase NPV B/C-Ratio NPV B/C-Ratio 5% -552,199 0.85 3,649,687 2.02 10% -316,368 0.91 3,885,518 2.08 Discussion This ex-post economic analysis of the Sustainable Land Management project confirmed the economic feasibility of the project. It was discussed that many benefits reached beyond the project boundaries, such as positive impacts on hydropower generation or the sequestration and storage of carbon. SLM also provided important amenity values that are important for enhancing the nature-based tourism potential of Bhutan. The economic analysis takes account of these values by using the values for ecosystem services reported by Kubiszewski et al. (2013). However, as these were per capita values and only the population reached by the project was considered, these values may be still underestimated. 38 It demonstrated that investments in SLM were beneficial and that a scaling-up of this SLM project should be considered beyond the project phase. By choosing a conservative approach when approximating economic values, limiting the quantitative valuation to only a few direct benefits and limiting it strictly to the target population reached by the project, the results were robust as they likely still underestimate the true economic impact of the project. However, given data constraints, additional economic impacts can only be discussed in qualitative form, mainly those arising from capacity building and mainstreaming as they are expected to positively influence the adoption of SLM practices far beyond the project boundaries in the coming years. 39 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Responsibility/ Names Title Unit Specialty Lending Senior Operations Task Team Leader until November Ai Chin Wee MNSRE Officer/Consultant 30, 2004 Ali Awais Counsel LEGMS Legal Barry Deren Consultant Economist Cecilia Belita Sr. Program Assistant SASES Program Assistant Christian Pieri Consultant Agro Ecologist Strategic Environmental David Annandale Consultant Assessment Debabrata Chakraborti Senior Procurement Specialist SARPS Procurement Gary Costello Consultant Ghazali Raheem Consultant John Frederick Consultant SASES Swartzendruber Kirsten Ewers-Andersen Consultant Policy and Institutional aspects Financial Management Madhavan Blachandran SARFM Financial Management Specialist Senior. Environmental Task Team Leader Malcolm A. B. Jansen SASES Specialist (Jan. 1, 2005 – Jul 29, 2011) Financial Management Manvinder Mamak SARFM Financial Management. Specialist Pema Gyamtsho Consultant Richard Damania Natural Resource Economist SASES Roger White Consultant Siet Meijer Consultant SASES Thao Le Nguyen Senior Finance Officer LOAG2 Disbursement Yeshey Lhendup Consultant Program Researcher Senior Natural Resources Yuka Makino SASES Natural Resources Management Management Specialist Zarafshan H. Khawaja Senior Social Specialist SASES Social Development Supervision/ICR Andrew Gillison Consultant Biodiversity. Anupam Joshi Senior Environmental Specialist SASDI Environment Senior Financial Management Arun Manuja SARFM Financial Management Specialist Debabrata Chakraborti Senior Procurement Specialist SARPS Procurement Eashwary Ramachandran Operations Analyst SASDI Operations Natural Resources Management Erick C.M. Fernandes LCSAR Natural Resources Management Advisor 40 University Jeffrey Richey Consultant of Hydrological Modeling Washington Joseph Shine E T Consultant SARPS Procurement Programs and Capacity Kalesh Kumar SARPS Procurement Building Coordinator Klas Sander Natural Resource Economist SASDI Kumaraswamy Senior Procurement Specialist SARPS Procurement Sankaravadivelu Task Team Leader Malcolm A. B. Jansen Consultant SASDI (Jan 1, 2005 - Jul 29, 2011) Senior Financial Management Manvinder Mamak SARFM Financial Management Specialist Task Team Leader Marinela Dado Senior Operations Officer SASDI (Nov 1, 2012 onwards) Samantha L. Forusz Program Manager HRSOP Financial Management Savinay Grover SARFM Financial Management Specialist Task Team Leader Sumith Pilapitiya Lead Environmental Specialist SASDI (Aug 1, 2011- Nov 1, 2012)/Co Task Leader Senior Social Development Varun Singh SASDS Social Development Specialist Lead Social Development Zarafshan H. Khawaja AFTCS Social Development Specialist Darshani De Silva Environmental Specialist SASDI ICR Task Team Leader Sati Achath Consultant SASDI ICR Consultant (b) Staff Time and Cost Stage of Project Cycle Staff Time and Cost Bank Budget GEF Budget No. of Staff USD Thousands (includes No. of Staff USD Thousands Weeks travel and consultant Weeks (includes travel and costs) consultant costs) Lending FY04 0 0 20.47 150.10 FY05 31.17 194.11 FY06 09.85 36.70 FY07 FY08 61.49 380.91 Total: Supervision/ICR FY04 FY05 FY06 01.75 07.67 FY07 0 -.24 6.15 39.64 FY08 0 0 07.09 54.18 FY09 0 0 07.21 57.66 FY10 0 0 06.73 49.42 41 FY11 01.33 08.08 06.86 44.19 FY12 09.19 33.37 00.10 17.12 FY13 14.06 59.08 02.87 24.34 Total: 24.58 100.29 38,76 294.22 42 Annex 5. Beneficiary Survey Results (if any) A beneficiary survey was conducted by the independent consultant hired by the borrower or the preparation of the borrower evaluation report. The survey was undertaken on a sample basis to obtain feedback from beneficiaries. Structured questionnaires designed for three different distinct groups in the field were employed to assess benefits and perceptions. Relevant key findings of the survey are presented below: Samples of chiogs and households were randomly drawn from two pilot geogs of Nangkor and Radhi, three scaled-up geogs of Bongo, Lumang and Goshing, and two Land Management Campaign sites, namely Thridangbi and Kilikhar in Mongar employing simple random sampling. From each of the five geogs, 35% of the total chiogs were randomly selected and likewise 35% of households from each of the selected chiogs were randomly chosen for the beneficiary survey. Table 5.1 and 5.2 provides the overview of the beneficiaries and stakeholders surveyed and gender based distribution of farmer respondents respectively. Table 5.1 Overview of beneficiaries and stakeholders Geog Community Geog Sample Village GSPT Total Administration Farmer Choongkha 9 15 Agri. EO, Gup, Mangmi, Bongo Beri 10 10 GSP (2) GAO Pakshikha 10 10 Shachari 2 8 Khargoen 2 2 Livestock Kharphoo 4 4 EO, Forest Lumang Kheri (Lumang) Gup, GAO 1 1 Ranger, GSP Kheshing (2) 8 8 (Lumang) Mooshi 1 1 Pakaling Agri. EO, 3 8 Radhi Doon Goenpa Livestock NRM (9) 14 Gup, GAO EO, Forest Chhima 6 6 Ranger Budhashi 8 12 Lamthang 8 8 Livestock Goshing Limapong Mangmi 4 4 EO, GSP (2) Samchheoling 11 11 Lichibi 9 9 Women’s Dakphel 15 Agri. EO, group (11) Nangkor Kidkhar Livestock Gup, Mangmi 4 4 Tali EO 6 6 Buli 2 2 Monger Kilikhar SLM Senior 1 2 43 site research officer Thridangbi Saling Agri. EO 1 2 SLM site Total 17 10 130 157 Table 5.2 Community farmers by geog and gender Geog Gender No. of respondents) Percentage Male 19 66 Bongo Female 10 34 Male 24 60 Goshing Female 16 40 Male 4 33 Nangkor Female 8 67 Male 8 89 Radi Female 1 11 Male 8 44 Lumang Female 10 56 Component I: Pilot projects to demonstrate effective application of land degradation prevention approaches The SLMP directly and positively impact on the livelihood of the communities by way of growing a variety of vegetables through improved soil fertility. Given the steep gradient of fields, SLM contributed to conserving soil fertility avoiding loss of topsoil through various interventions. Interventions on smart agriculture practices such as terracing, stone bunding, agro- forestry, farmer-groups, improved farmyard manure, orchard development and water source protection immensely benefitted farmers in the project areas. Other equally important interventions such as irrigation channel renovation, monetary incentives to attract farm labor, bamboo plantations, community forests, fodder base improvement, poultry farms also benefitted from adopting sustainable land management activities. Potato and ginger were two key cash crops that were listed in almost all villages as significant for livelihoods of the communities, which were supported as part of short-term benefits. In combination with structural and vegetative sustainable land management interventions such as hedgerows, stone bunding and bench terracing, ginger cultivation were considered as a more sustainable and viable income generating farm activity. Specifically ginger continued to be an important source of cash income for the communities of Logchina and Bongo geogs. Market demand for potatoes and ginger are on the rise but lack of good roads and high transaction cost continue to pose challenges to profitable ventures. Improved cattle sheds as one of the SLM activities resulted in better cash income from the sale of milk, butter and cheese. The animal production was also improved due to better fodder availability and improved cattle sheds. Besides the cash income, it reduced workload of farmers because of readily available fodder, replacing cumbersome fodder collection from the distant forest. This also reduced grazing pressures to vulnerable land. The stone bunds resulted in 44 increased yields through preventing topsoil erosion, improved workability and larger area for annual cropland development. The citrus orchards initially supported by the project were found to be closing the fruiting stage. Table 5.3 shows that 96.55% of respondents in Bongo, 97.5% percent in Goshing, 91.67% in Nangkor, and 100% in Radhi and Lumang were of the opinion that SLMP enhanced the livelihood of farmers. This was attributed to SLM key interventions such as vegetable production, payment for contractual services, improved dairy sheds, farmyard manure and poultry. However 8% of people in Nangkhor seem less happy as soya beans supplied performed poorly and were largely infested with insects. Table 5.3. Community members’ opinion on SLMP’s enhancing the livelihood of farmers Enhancing the Frequency (No. of Geog livelihood of Percentage respondents) farmers? Success 28 96.55 Bongo Failure 1 3.45 Success 39 97.50 Goshing Failure 1 2.50 Success 11 91.67 Nangkor Failure 1 8.33 Success 9 100.00 Radhi Failure 0 0.00 Success 18 100.00 Lumang Failure 0 0.00 As per Table 5.4, 96.55% of the respondents in Bongo, 91.67% in Nangkor, 100% in Goshing, Radi and Lumang said SLM interventions had a positive impact on land resources. Table 5.4 Effect of SLMP on productivity of land resources Geog Effect Frequency Percentage Positively 28 96.55 Bongo No effect 1 3.45 Negatively 0 0.00 Positively 40 100.00 Goshing No effect 0 0.00 Negatively 0 0.00 Positively 11 91.67 Nangkor No effect 1 8.33 Negatively 0 0.00 Positively 9 100.00 Radhi No effect 0 0.00 Negatively 0 0.00 Positively 18 100.00 Lumang No effect 0 0.00 Negatively 0 0.00 45 The survey also indicated that vegetable production generated the highest cash income for farmers followed by poultry, piggery and dairy (refer to Table 2.1 in Annex 2. Component II: Mainstreaming of practices for protection against land degradation. SLMP was designed as a community-based project to build awareness and capacity of rural communities to recognize and address land-based problems using a sequential and integrated series of participatory approaches. The general feedback on these approaches as applied for SLM at community and municipality level were positive based on the responses from all key stakeholders met during the consultation period. As shown in Table 5.5 all of the respondents in all geogs indicated that the trainings carried out by SLMP were relevant and useful. Farmers responded that training programs on SLM activities were highly beneficial to them, in terms of enhancing their knowledge and skills and also in changing their attitudes towards SLM and its adoption. Table 5.5 Community members’ opinion about the training activities provided by SLMP Geog Usefulness Frequency Percentage Very useful, relevant and 25 86.21 Bongo applicable Useful 4 13.79 Not useful 0 0.00 Very useful, relevant and 39 97.50 applicable Goshing Useful 1 2.50 Not useful 0 0.00 Very useful, relevant and 11 91.67 Nangkor applicable Useful 1 8.33 Not useful 0 0.00 Very useful, relevant and 6 66.67 applicable Radi Useful 3 33.33 Not useful 0 0.00 Very useful, relevant and 17 94.44 applicable Lumang Useful 1 5.56 Not useful 0 0.00 From the two questions asked from GSPTs, Agricultural Extension Officers, Livestock Extension Officers, Forest Rangers and GSPs (as depicted under Table 5.6), it was inferred that the beneficiaries who were exposed to multiple trainings were more confident in extending SLM knowledge to the farmers. Table 5.6 Training/skills/information related to SLM 46 How did you get training/information/skills related to SLMP? SLM- How bioengine confident are ering you in training, SLM- SLM- study bioengine bioengine Grand extending SLM tours ering ering Study No Total SLM knowledge to training within training, training, tour training the farmer? country study SLM and tours, training overseas, SLM training Very confident 1 5 1 0 1 0 5 Confident 2 1 0 1 0 1 2 Not so 0 0 0 0 0 2 8 confident Grand Total 3 6 1 1 1 3 15 Responses in Table 5.7 from Gups, Mangmis and Geog Administration Officers show that the collaborative working was excellent with good community participation. Table 5.7 Collaborative working by community engagement How would you describe the collaborative working at geog level, How would you describe the community between extension teams, engagement? Grand Total community members and geog administration staff? Good Fair Poor Excellent 4 0 0 4 Good 1 2 0 3 Fair 0 1 0 1 Poor 0 0 1 1 Grand Total 5 3 1 9 Component III: Policy support and guidance for mainstreaming of land degradation prevention practices The land management campaigns continued as part of the regular agriculture development interventions. They were carried out annually, thus helping in mainstreaming SLM with the core plans and programs, as well as dissemination of knowledge to farming communities, RNR staff and local authorities. 47 According to Table 5.8, respondents comprising gups, geog administration officers, and mangmis said SLM activities can be sustained even after the project is over, because they are increasingly incorporated into the Five-Year Plans. Table 5.8 Sustainability of Mainstreaming Do you think SLM activities are being Do you think SLM activities can be sustained after increasingly the project is over? Grand total incorporated into 5-year plan? Yes No Do not know Yes 6 0 1 7 No 0 0 1 1 Grand Total 6 0 2 8 It was noted that only a few farmers with large landholdings and abundant resources were in a position to appreciate long-term benefits that will emerge after a number of years post-project period. On the other hand, smallholders and marginal farmers were keen to pursue on SLM practices that bring immediate benefits or gains that were otherwise impeded by socioeconomic hardships. Therefore, two-tier approach was successful as it facilitated long-term interventions such as orchard plantations, agro-forestry, afforestation and bench terracing while providing direct short-term benefits such as distribution of improved seeds and farming tools and equipment. The survey results as shown in Table 5.9, reported that over 90% of farmers in all nine geogs stated that SLM activities will be sustainable and will continue even after the project ends. This was a positive indication towards sustainability. Three out of the five geogs sampled indicated their willingness to continue SLM activities (Table 5.10). Table 5.9 Sustainability of SLM activities post SLMP Do you think SLM activities can sustain Geog Frequency Percentage after the project is over? Yes 27 93.10 Bongo Don’t know 1 3.45 No 1 3.45 Yes 38 95.00 Goshing Don’t know 1 2.50 No 1 2.50 Yes 11 91.67 Nangkor Don’t know 1 8.33 No 0 0.00 Yes 9 100.00 Radi Don’t know 0 0.00 No 0 0.00 Lumang Yes 17 94.44 48 Don’t know 1 5.56 No 0 0.00 Table 5.10 Community members’ willingness to continue with SLM activities Geog Willingness Frequency Percentage Yes 28 100 Bongo No 0 0 Yes 38 95 Goshing No 2 5 Yes 11 92 Nangkor No 1 8 Yes 9 100 Radi No 0 0 Yes 18 100 Lumang No 0 0 The following additional findings as provided under tables 5.11 – 5.23 also derived from the beneficiary survey. • On average 90% of respondents indicated that their expectations were met through the project, while 10% responded negatively • 58% respondents indicated that they are completely satisfied, 34% indicated that they are satisfactory and 8% indicated not satisfied in terms of community experience • About 54% responded that all their land-based problems were identified about 41% indicated that some of the problems were identified and about 1 % indicated that their problems were not identified • About 65% was very happy, about 34% was happy and about 0.6% was unhappy with the final SLM plans • 98% respondents felt that there are visible changes in the village due to SLM, while 2% indicated that there are none • 99.6% felt that the project was successful in mitigating land-based problems and 0.4% felt the project was not successful • Over 99% felt that the income of communities increased due to SLM related activities, less than 1% felt there were no effect, while no single respondent felt there was a decrease • About 98% felt the project was successful in advocating, promoting and implementing more suitable land management practices, while about 2% felt it was a failure Table 5.11 Community farmers’ expectations Expectation been Geog No. of respondents Percentage met? Yes 24 83 Bongo No 5 17 Yes 40 100 Goshing No 0 0 49 Yes 9 75 Nangkor No 3 25 Yes 8 89 Radi No 1 11 Yes 18 100 Lumang No 0 0 Table 5.12 Community members’ experience up to now with SLMP Geog Satisfaction Frequency Percentage Completely satisfied 12 41 Bongo Satisfied 11 38 Not satisfied 6 21 Completely satisfied 27 68 Satisfied 13 33 Goshing Not satisfied 0 0 Completely satisfied 5 42 Nangkor Satisfied 6 50 Not satisfied 1 8 Completely satisfied 6 67 Satisfied 3 33 Radi Not satisfied 0 0 Completely satisfied 13 72 Lumang Satisfied 3 17 Not satisfied 2 11 Table 5.13 Effectiveness of SLM action planning Land-based Geog No. of respondents Percentage problems identified? All 16 55 Bongo Some 13 45 Not at all 0 0 All 29 73 Goshing Some 11 28 Not at all 0 0 All 7 58 Nangkor Some 5 42 Not at all 0 0 All 6 67 Radi Some 3 33 Not at all 0 0 All 7 39 Lumang Some 10 56 Not at all 1 6 Table 5.14 Community members’ happiness with the final SLM action plan 50 Frequency (no. of Geog Happiness level Percentage respondents) Very happy 20 69 Bongo Happy 8 28 Not happy 1 3 Very happy 33 83 Goshing Happy 7 18 Not happy 0 0 Very happy 7 58 Nangkor Happy 5 42 Not happy 0 0 Very happy 6 67 Radi Happy 3 33 Not happy 0 0 Very happy 9 50 Lumang Happy 9 50 Not happy 0 0 Table 5.15 Visible changes in the villages because of SLMP Geog Any visible changes? No. of respondents Percentage Yes 28 97 Bongo No 1 3 Yes 40 100 Goshing No 0 0 Yes 12 100 Nangkor No 0 0 Yes 9 100 Radi No 0 0 Yes 17 94 Lumang No 1 6 Table 5.16 Community members’ opinion on SLMP’s mitigating land based problems. Mitigating land based Frequency Geog Percentage problem? (respondent) Successful 29 100 Bongo Failed 0 0 Successful 40 100 Goshing Failed 0 0 Successful 11 92 Nangkor Failed 1 8 Successful 9 100 Radi Failed 0 0 Successful 17 94 Lumang Failed 1 6 Table 5.17 Community members’ opinion on SLMP’s enhancing livelihoods of farmers 51 Enhancing the Geog livelihood of Frequency Percentage farmers? Successful 28 96.55 Bongo Failed 1 3.45 Successful 39 97.50 Goshing Failed 1 2.50 Successful 11 91.67 Nangkor Failed 1 8.33 Successful 9 100.00 Radi Failed 0 0.00 Successful 18 100.00 Lumang Failed 0 0.00 Table 5.18 Community members’ income affected by SLMP Geog Effect Frequency Percentage Increased 28 96.55 Bongo No effect 1 3.45 Decreased 28 0.00 Increased 40 100.00 Goshing No effect 0 0.00 Decreased 0 0.00 Increased 12 100.00 Nangkor No effect 0 0.00 Decreased 0 0.00 Increased 9 100.00 Radi No effect 0 0.00 Decreased 0 0.00 Increased 18 100.00 Lumang No effect 0 0.00 Decreased 0 0.00 Table 5.19 Effects of SLMP on productivity of land resources Geog Effect Frequency Percentage Positive 28 96.55 Bongo No effect 1 3.45 Negative 0 0.00 Positive 40 100.00 Goshing No effect 0 0.00 Negative 0 0.00 Positive 11 91.67 Nangkor No effect 1 8.33 Negative 0 0.00 Positive 9 100.00 Radi No effect 0 0.00 52 Negative 0 0.00 Positive 18 100.00 Lumang No effect 0 0.00 Negative 0 0.00 Table 5. 20 Community members’ opinion on SLMP’s advocating, promoting and implementing more suitable land management practices Advocating, promoting and implementing more Geog Frequency Percentage suitable land management practices Success 29 100.00 Bongo Failure 0 0.00 Success 40 100.00 Goshing Failure 0 0.00 Success 11 91.67 Nangkor Failure 1 8.33 Success 9 100.00 Radi Failure 0 0.00 Success 18 100.00 Lumang Failure 0 0.00 Table 5.21 Action plan by land related problems Did it help to reduce land related Geog Were you happy with the problems? final SLM action plan? Yes No Very happy 21 (72.41%) 0 Bongo Happy 7 (24.14%) 0 Not happy 0 1 (3.45%) Very happy 33 (82.50%) 0 Goshing Happy 7 (17.50%) 0 Not happy 0 0 Very happy 6 (50.00%) 0 Nangkor Happy 6 (50.00%) 0 Not happy 0 0 Very happy 6 (76%) 0 Radi Happy 3 (33%) 0 Not happy 0 0 Very happy 9 (50%) 0 Lumang Happy 9 (50%) 0 Not happy 0 0 Table 5.22 Land-based problems by SLM Action Planning methodology 53 Did SLM How would you rate the SLM AP Would you use the elements of SLM in a Action methodology new Geog posting? Planning help you to identify Neither a the most A success important A failure Definitely Not so sure Not at all success nor a land-based failure problems? Yes 11 0 0 0 1 0 To some extent 0 0 0 0 2 0 No 0 1 0 0 0 0 Table 5.23 Sustainability by livelihood, mitigating land based problems and advocacy Do you Advocating, think SLM Enhancing the promoting and Mitigating land activities livelihood of implementing suitable based problems? can be farmers? land management Geog sustained practices? after the project is Success Failure Success Failure Success Failure over? Yes 27 0 27 0 27 0 Bongo Don’t know 2 0 2 0 2 0 No 0 0 0 0 0 0 Yes 37 1 38 0 38 0 Goshing Don’t know 1 0 1 0 1 0 No 1 0 1 0 1 0 Yes 10 1 11 0 11 0 Nangkor Don’t know 1 0 1 0 1 0 No 0 0 0 0 0 0 Yes 9 0 9 0 9 0 Radi Don’t know 0 0 0 0 0 0 No 0 0 0 0 0 0 Yes 17 0 17 0 17 0 Lumang Don’t know 1 0 1 0 1 0 No 0 0 0 0 0 0 54 Annex 6. Stakeholder Workshop Report and Results (if any) Due to election restrictions of not allowing large gatherings, the project was unable to hold a stakeholder consultation as originally planned to be held during the last quarter of project implementation (April-June, 2013). 55 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR Comments of Draft ICR The following comments were received from Department of Public Accounts in Bhutan: • There is a mention of the project "Rural Livelihood Project" within the Policy and Planning Division of the MoAF. If the project mentioned here is the one under the World Bank funding, kindly note that the name has been changed to "Remote Rural Communities Development Project". Based on the comment and further verification, the reference was updated. • As some of the information is related to GNHC, it might be a good idea to get GNHC's clearance or comments on the ICR as well, especially on the Eleventh Five-Year Plan. The NSSC followed up with GNHC and confirmed that there are no specific comments to the draft ICR. • As most of the information is on the project achievements and activities, the project team (i.e. NSSC) would be in a better position to comments on the facts and figures. The facts and figures were verified with NSSC during the early stage of drafting the ICR and the NSSC indicated that there are no further comments and is pleased with the rating provided by the ICR team. Executive Summary of Borrower’s Evaluation Report – October 22, 2013 The Kingdom of Bhutan is a small landlocked country in the Eastern Himalayas with an area of 38,394 km2 and a population of 720,679. Located within the Himalayan range, the ecosystems of Bhutan are fragile and unstable and include about 72.5 percent of snow, barren rocks and forests. Because of its topography and altitude, Bhutan has inherently limited resources of productive land. Being a predominantly agrarian society, 79 percent of Bhutan’s population live in rural areas and subsist on an integrated livelihood system of crop agriculture, livestock rearing, and use of a wide variety of forest products. Out of the 8 percent arable land available in Bhutan, only 2.9 percent is actually cultivated. Moreover, the predominantly steep slopes put these resources at particular risk from some form of degradation or the other. Land degradation is therefore an even more serious threat in Bhutan than in most places. The Sustainable Land Management Project started its implementation in 2006 to support the Royal Government of Bhutan’s efforts to prevent and reverse land degradation and mainstream sustainable land management into its national development and planning framework. The project was financed by the Global Environment Facility grant of US$7.66 million through the World Bank. This was supplemented with a parallel financing from the Danish International Development Assistance and the Royal Government of Bhutan providing US$ 5.77 million and US$ 2.46 million respectively. The project’s development objective was to strengthen institutional and community capacity for anticipating and managing land degradation in Bhutan, 56 while its global environmental objective was to contribute to more effective protection of trans- boundary watersheds in a manner that preserves the integrity of ecosystems in Bhutan. The Global Environmental Facility grant has supported four main components to achieve the project objectives including, 1) pilot projects to demonstrate effective application of land degradation prevention approaches, 2) mainstreaming of practices for protection against land degradation, 3) policy support and guidance for mainstreaming land degradation prevention practices, and 4) national level support for coordination of land degradation prevention practices. The project implementation completion study covers development outcomes and performance indicators ranging from sustainability, effectiveness and efficiency of the institutional development and implementation in order to achieve project objectives. Project evaluation also included effectiveness of community participation in decision-making, impact of activities carried out under each component, and compliance towards fiduciary and safeguard requirements. The project was implemented under the supervision of the National Soil Service Center structured within the Ministry of Agriculture and Forests. Over the last seven years (2006-June 2013) the project has benefitted 3 dzongkhags, 9 gewogs, 138 chiwogs and 4,552 households corresponding to a total population of 31,274. The multi-sectoral approach and phase-wise implementation modalities of the project received wide appreciation not only from policy makers in the center but also from wide quarters in the dzongkhags and gewogs that participated in the project. The phase-wise approach starting with pilot, scale up and other land management campaign activities benefitted all stakeholders from the planning to lessons learnt and equitable distribution of benefits. The key objective of the Project Implementation Completion Report is to evaluate the overall Sustainable Land Management Project design and implementation status and process thereof. The aim of the evaluation is to assess the extent to which the project components and activities achieved those objectives and determining the exactitude and feasibility of project objectives. The study also identified institutional, social, environmental, financial and other impacts of the project at the local level as well at the higher levels resulting from the implementation of the project. Component One: Pilot projects to demonstrate effective application of land degradation prevention approaches Component One refers to effective applications of land degradation preventive activities under the three pilot gewogs of Nangkor, Phuentsholing, and Radhi. Main project activities under this component included supporting a GIS-based biophysical and socioeconomic resource mapping to identify causes and intensity of land degradation in the area. Pilot gewogs were prioritized on the basis of the severity of the land degradation, namely extent of deforestation and overgrazing, improper irrigation water management and type of agricultural practices. The component was also designed to support community decision making of potential sustainable land management investments at the chiwog level through capacity building initiatives. These included training of gewog staff, physical investments at the community level, conducting national and regional workshops, monitoring and evaluation. Total GEF funding for the component was appropriated at US$1.37 million. 57 Under Component One, GIS-based analytical tools such as satellite imagery and topographical maps were prepared for 47 chiwogs of 3 pilot gewogs and for the 6 scaled-up gewogs. In addition, land management manuals and 138 renewable natural resource maps were prepared of which 48 were digitized and national land cover maps updated. The GIS based technology successfully identified land degradation “hotspots” and prioritized sustainable investments starting with the pilot gewogs. Component One also had direct and positive impact on the livelihood of rural communities by way of growing a variety of vegetables through improved soil fertility and avoiding loss of topsoil through various sustainable land management interventions. For example, smart agriculture practices such as terracing, stone bunding, agro-forestry, improved farmyard manure, orchard development and water source protection immensely benefitted farmers in the project areas. Other equally important interventions such as irrigation channel renovation, bamboo plantations, community forests, fodder improvement, poultry farming resulted in huge gains. Potato and ginger of all cash crops listed in almost all villages as significant for livelihood income of the communities. Likewise, in other agro-ecological zones, improved cattle sheds resulted in better cash income from the sale of dairy products through improved animal production from improved fodder availability. Cash rewards are yet to be realized by some farmers venturing into citrus orchards considering the long gestation period. A total of 8,445 acres (3,447 hectares) of vulnerable land was improved through various sustainable land management interventions such as establishment of community forest and private forest, water source protection, check dams, bamboo and tree plantation, afforestation, and legume cropping during the project period. Similarly, a total of 9,173 acres (3,744 hectares) of ex-tseri land was converted to more sustainable land use through establishment of orchards, terracing, hedgerows, stone bunding, fodder tree plantation and agroforestry during the project period. Component Two: Mainstreaming of practices for protection against land degradation Component Two involved mainstreaming practices for protection against land degradation through the introduction of new organizational arrangements for multi-sectoral planning, capacity and skills development, budgetary realignment, and analytical tools for promoting sustainable land management approach. The component also supported scaling up activities in the six additional gewogs. Some of the result indicators under the component include gewogs independently implementing land degradation and prevention sustainable land management plans in addition to resolving inter-intra dzongkhag and gewog conflicts. Total Global Environment Facility funding for Component Two appropriated a budget of US$4.41 million. Under Component Two scaling up sustainable land management practices in the six additional gewogs started towards the fourth year of the project with natural resource surveying and mapping, training of dzongkhag and gewog officials as part of the initial ground preparation. Adoption of sustainable land management activities by farmers showed encouraging signs; perhaps contractual payments could be one contributing factor in addition to few beneficiaries realizing long-term blessings from project activities at their fields. As part of the inter and intra- dzongkhag conflicts over resource use the project actively supported new policy development on grazing and forest use issues in collaboration and the studies on rangeland management. Trainings and seminars on conflict management and practices preventing land degradation were provided extensively to the gewog and dzongkhag staff. From the beneficiary survey, target on 58 creating awareness and capacity building of staff and farmers in sustainable land management was met adequately with 88 percent of pilot dzongkhag Renewal Natural Resource staff and 90 percent of the Dzongkhag Tshogdu members trained in multi-sectoral sustainable land management. Component Three: Policy support and guidance for mainstreaming land degradation prevention practices Component Three provided policy support and guidance for mainstreaming land degradation prevention practices in national level policies and plans. The project influenced the Tenth Five Year Plan by incorporating stronger sustainable land management content as compared to the Ninth Five Year Plan in terms of targeted programs and activities. The Eleventh Five Year Plan preparation both at the national and local levels provided substantial opportunities for strengthening sustainable land management approaches in different sector and administrative levels. For example, nine gewogs, three each from each of Zhemgang, Chhukha, and Trashigang dzongkhag incorporated sustainable land management action planning processes into their annual development planning processes. Sustainable land management activities have a continuous engagement in nature and since the planning cycle are repeated annually, it gave sufficient time for farmers to get proper understanding of the objectives, methods and technologies promoted and introduced under the sustainable land management interventions. In addition, sustainable land management principles significantly been incorporated into policy and legal reforms through the revised Land Act of Bhutan 2007, National Forest Policy of Bhutan 2011, and inputs into the national grazing study. Sustainable land management principles were also integrated into national development and environmental framework via National Capacity Self-Assessment, National Adaptation Program of Action and National Biodiversity Action Plan. In addition, numerous local level resource management guidelines were formulated for gewogs and local communities including by-laws for community forestry, water user association groups. Component Four: National level support for coordination of implementation of land degradation prevention practices Finally, Component Four supported strengthening the capacity of institutions to effectively coordinate the implementation of activities for preventing and managing land degradation. An important aspect of this component was to rationalize the organizational structure of the Ministry of Agriculture and Forests to enable it to systematically and effectively coordinate between different sectors and different levels of government to achieve sustainable land management outcomes. The project was successful in terms of building both institutional and human resource capacity at different levels of the government by conducting both long-term and short-term studies. As part of institutional strengthening and coordination among stakeholders, annual review workshops were conducted every year with members of the multi-sectoral advisory committee functioning as a consultative and advisory body. The Sustainable Land Management Project was successful in mainstreaming sustainable land management activities into broader government policies and plans, acts and guidelines. For example, the National Action Plan to Combat Land Desertification offers an institutional set-up that ensures an adequate multi-sectoral 59 representation and interest in sustainable land management as a key underlying theme. Various activities were undertaken such as the Livelihood Analysis Survey for the scaling-up gewogs and development of Land Bill of Bhutan. Among others, Component Four also supported gewog planning and implementation of Land Cover Mapping. Other interventions included support towards poultry farming, dairy management, community forestry, stonewall terracing, planting hedgerows, orchard plantations, seed distribution. Key Achievements The key achievements of the project based on the results framework are summarized in the Table below: Results Outcome Project Development Objective: Strengthen institutional and community capacity for anticipating and managing land degradation in Bhutan. Indicator 1:30 percent The project supported 3,146 farming households. The percentage increase in number of increase at project closure was 70 percent. farmers practicing sustainable land management techniques. Indicator 2: Number of As planned by the project preparation a total of 9 gewogs gewogs implementing land including 3 pilot gewogs and 6 scaled-up gewogs are degradation prevention implementing SLM plans. In addition, the project supported SLM development plans. activities proposed by 23 other gewogs. Global Environmental Objective: Contribute to more effective protection of trans-boundary watersheds in a manner that preserves the integrity of ecosystems in Bhutan. Indicator 1:10 percent Currently, the average annual soil loss is about 29MT/Ha/Year reduction in annual soil loss. and SLM interventions, mainly Napier grass hedgerows reduced annual soil loss by about 44 percent. For example, (i) Napier hedgerow establishment on steep dryland slopes included planting along the contour lines and acting as a physical barrier, arresting and trapping soil and water moving downslope, reducing slope angle as terraces start to form over time and producing fodder for livestock; and (ii) Orchard terracing reduced slope angle, helping to conserve soil and moisture, in addition to the benefits of fruit tree plantation. Other on site benefits of the SLM interventions increased agriculture productivity through improved workability, better restoration and enhancement of soil fertility and moisture; increased livestock productivity through better fodder availability from grass hedgerows and fodder tree plantation; and increased cash income sources, e.g. in Radhi bamboo has become a new cash income source. 60 Results Outcome In addition to the above on-site benefits, there are numerous off- site, downslope and downstream benefits (environmental services) that are expected on long-term. For instance, through reduced overland flow there is less damage in households and land located downslope and also lower sediment load downstream. Component One: Pilot projects to demonstrate effective application of land degradation prevention approaches. Indicator 1.1:GIS based SLM Action Planning Manual prepared in 2009; 138 renewable analytical tools developed natural resource (RNR) maps prepared of which 48 were and used to track SLM, digitized; and national land cover maps were updated in 2010 identify land degradation hot-spots and prioritize SLM investments. Indicator 1.2:Survey -do- instruments for assessing the presence or absence of indicators for guiding farming practices developed and implemented. Indicator 1.3:2,740.7 acres 8,383.6 acres of forest and grazing land in project sites and 61.7 of degraded forestland acres in other gewogs were regenerated and improved. regenerated and grazing This included (i) group private forests and community forests, a lands improved. form of social forestry covering 6,453.8 acres established in fallow dryland owned by group members to enhance vegetative cover, reduce soil erosion and promote timber and firewood availability; (ii) 74.8 acres of water source protected; (iii) 958.2 acres of afforestation; (iv) legume cropping of 380.7 acres where mixed cropping with leguminous crops enhanced soil fertility and diversified agriculture production; (iv) 466.8 acres of grazing land improved; (v) 111 acres of sloping agricultural land technology (SALT) and LMC including contour grass strips by growing of temperate grass mixture along the contour line at higher altitude acted as vegetative barriers and provided good quality fodder for livestock. In addition, (i) winter cropping/over crops conserved moisture, prevented soil from wind erosion, produced additional food and enhanced aesthetic value of production landscape; (ii) bamboo plantation in gullies and degraded sites to mitigate and prevent gully erosion, improve root mass and stabilize soil and slopes, and as a source of cash income; (iii) stone check dams constructed in gullies and streamlets to reduce the erosive power of running water at peak flow and to retain sediment behind the 61 Results Outcome dam; and (iv) improved FYM cattle sheds by changing traditional forest free grazing of cattle towards stall feeding with improved fodder base nearby and also enabling application of FYM on cropland. Indicator 1.4:3,405.8 acres 9,173.1 acres of ex-tseri land (slash and burn agriculture, which is of tseri lands converted to banned now in Bhutan) were converted to sustainable land cover. sustainable land cover. Some of the SLM technologies that were put in place included (i) 2,434.7 acres of citrus orchard development on steep dryland slopes to develop environmentally sound production system which will maintain vegetative cover on and reduce soil erosion, as well as generate cash income on long term; (ii) 323 acres of dryland terracing, which included forward sloping dryland terracing that reduced slope angle by which soil and moisture was conserved and forward sloping dryland terracing that reduced slope angle by which soil and moisture was conserved; (iii) wetland or Chhuzhing terracing of 223.3 acres for irrigated paddy cultivation reduced slope angle and was used for irrigated paddy cultivation; (iv) hedgerows of 2,338.8 acres; (v) 924.1 acres of stone bunds; (vi) 2,780.8 acres of annual crops. Component Two: Mainstreaming of practices for protection against land degradation. Indicator 2.1: Number of During the final year of implementation no conflicts were intra- and inter Dzongkhag recorded. Minor conflicts that emerged during implementation and gewogs conflicts over were resolved during SLM action planning at village level. grazing/ forest use resolved. Indicator 2.2:80 percent of At the closure of the project 88 percent RNR staff, 90 percent RNR staff, Dzongkhag DYT members and 100 percent GYT members were trained in Yargye Tshogdu (DYT) / SLM planning and implementation. District Development Committee and Gewog As part of the capacity building 17,520 farmers were trained, 763 Yargye Tshogchung (GYT) RNR staff were trained in-country and 317 staff were provided / Block Development short and long term training outside Bhutan. Committee members in pilot sites trained in multi- sectoral SLM planning and implementation in pilot gewogs. Indicator 2.3:50 percent of 100 percent of farmers were trained in the application of SLM farmers in pilot gewogs technologies. trained in application of SLM technologies. Component Three: Policy support and guidance for mainstreaming land degradation prevention practices. 62 Results Outcome Indicator 3.1:SLM planning The One Gewog Three Products (OGTP) plans adopted as a core guidelines included in Tenth activity in the Tenth Five-Year Plan included SLM activities. The and Eleventh five-year guidance note for SLM planning was developed and Eleventh plans. Year Plan contains relatively more SLM activities. Indicator 3.2:At least nine All project targeted gewogs & Dzongkhags have SLM activities target gewogs and incorporated in the 11th Five Year Plan. dzongkhags annual The comprehensive planning approach, with a range of tools development planning originating from Participatory Rural Appraisal and Participatory processes incorporating Learning and Action, such as problem census, history lines and SLM. participatory mapping used across project areas put people at the center of development. Such an approach with its consultative approach and use of illustrations empowered communities concerned enabling even the illiterate to actively engage. Indicator 3.3:At least five In 2010 the National Land Policy was drafted, the Land Act 2007 revised sector policies and approved and implemented that contains several revised clauses legislation incorporating relevant to SLM and grazing study undertaken to support the SLM principles. Grazing Policy. Indicator 3.4:At least 10 A total of 140 local level resource management regulatory local level resource agreements were formulated out of which 37 are community management regulatory forests. agreements formulated for gewogs and local communities for SLM. The following are other achievements and outputs that contributed to the success of the project: 1. Investments that benefitted the farmers immediately such as (i) 1,155 dairy sheds improvement (ii) 83km of irrigation channel renovation (iii) Provision of 1,404 numbers of improved beehive boxes (iv) Supply of 16 breeding bulls (v) 165 poultry and piggery enterprises (vi) Supply of 48 post-harvest machineries and 914 sets of agricultural tools 2. Establishment of soil erosion plots for regular monitoring of soil erosion trends and demonstrating soil conservation technologies 3. Land cover of Bhutan was updated in 2010 4. Dynamic information framework (DrukDIF) was developed for long-term natural resource management Institutional Setup and Project Management The National Soil Service Center provided main management support and facilitated the sustainable land management project upon constituting an inter-ministerial Multi-Sectoral 63 Advisory Committee. A Project Management Team constituting a project director, project manager and unit heads performed the day-to-day administrative and coordination functions of the project. At the dzongkhag level, with Dzongda as the Chief Executive Officer, the project received support and collaboration from Dzongkha Sector Heads namely, Dzongkha Agriculture Officer, Dzongkha Livestock Officer, Dzongkha Forest Officer, and the Land Record Officer. Major part of the implementation activities was carried out at the gewog level following standard local government administrative norms and practices. The Gup as the Chairman, activities were implemented with assistance from Gewog Sustainable Land Management Planning Teams, Field Coordinators and village elders. Capacity building initiatives were undertaken with a total of 17,237 farmers trained and a total of 317 through training of government staff and local leaders. Development of digitized maps, GIS- trained professionals, farmers and local government officials adopting sustainable land management policies and field activities were some of the exhibits related to capacity building and institutional strengthening. Documentation on sustainable land management practices was undertaken extensively exhibiting lessons learnt, timely field reports and annual publications. Other achievements under capacity building included construction of improved dairy sheds (1,150 no.), renovation of irrigation channels (83 Km), supply of improved bee hives (1,404 boxes), supply of breeding bulls (16 no.), developing piggery and poultry combined a total of 165 numbers. Post-harvest machines (48 no.) and agriculture tools (914 sets) were also distributed. The financial management system activities were proven efficient after revising the initial fund flow release mechanisms. Such change in the financial management system was supported by the trainings and guideline preparation for improved service delivery. The project also followed the government’s public expenditure management system or PEMS thus facilitating efficient operations. With the project management team facilitating fund release, the concerned project officer at the Department of Public Accounts directly transfers the fund to the gewog Letter of Credit account. Together, procurement requirements were carried out in accordance with the World Bank’s guidelines on procurement under the IBRD loans and IDA credits and guidelines for selection and employment of consultants by World Bank Borrowers. The project exhibited exemplary functional and administrative benchmarks and achievements with the multi-sectoral advisory committee and the project steering committee as management heads. Fund transfer at the initial years of the project was directly from the center to the project field coordinators and later disbursed through the Gup’s office. Fully functional and well-defined financial, monitoring and information management system were in place as captured well with the Gewog SLM Planning Teams relaying information on the quarterly project activity progress reports aligned with the planning and monitoring system (PLAMS). In addition, the GSPTs carried out in participatory monitoring and evaluation and its learning and experiences were used in improving the plan. Monitoring of project activities were closely rendered through monthly reports, plan targets and project objectives, annual review meetings, Project Management Team and Multi-Sectoral Technical Advisory Committee supervision. 64 The project adhered to strict environmental compliance standards by following two distinct screening steps forming a continuous interactive process during planning, implementation, evaluation and impact assessment. First tier screening was done at a chiwog level with the second tier screening repeated at the gewog level. Within nine project gewogs, a number of activities were screened out or implemented with certain modifications to limit negative social and environmental impacts or proposed fencing support groups. This included, for instance the group private forest plantation area of Dribla in Thrimshing gewog under Trashigang Dzongkhag. Participatory monitoring and evaluation was carried out not only at the decentralized level with the beneficiary communities in all nine SLMP gewogs, but also at project management level with a range of district and national level stakeholders in the annual review workshops. Specific monitoring of project activities was carried out based on the project targets and benchmarks based on set of indicators identified during project designing stage. Similarly, introduction of social and public accountability mechanisms with the participatory approach in planning, budgeting and expenditure not only built local capacity but also furthered good governance with community members collectively exerting social control on performance and equitable distribution of sustainable land management project activities. Sustainability Sustainable Land Management (SLM) is high labor intensive approach that also requires substantive level of capital financing. The sustainability of the project activities will largely depend on the availability of resources in terms of budget allocation in future development plans of gewogs. With farm labor decreasing each year and the discontinuing of funding after the project period will provide a challenge for farmers to continue taking up sustainable land management activities. The ability of households to adopt future SLM interventions, as well as maintain the SLM activities already in place will largely depend on farmers’ capacity to mobilize the continuous requirement of human and financial resources. One of the main intrinsic objectives of the project being improving livelihoods and quality of life of farmers, the establishment of strong informal labor groups and increased social capital contributed immensely to support community growth and future sustainability. However, only few farmers with large landholdings and adequate resources are in a position to appreciate long-term benefits deriving out of the land management activities. It is concluded that the two-tier approach was successful which facilitated long-term interventions such as orchard plantations, agro-forestry afforestation, bench terracing alongside direct short-term inputs such as distribution of improved seeds, farming tools and equipment and payments for contract services. Past reports mentioned that such a dual approach has proven worthy with a clever sequence of short-term and long-term interventions to entice farmers to continue. Sustainability also depends highly on how the farmer groups based organizations are capable of enhancing the opportunities of the sustainable land management activities as a community and develop linkages with institutions outside the gewog and even dzongkhag to capture more opportunities to shape their members socioeconomic development. The longer-term sustainability of such linkages however, requires adequate support from public resources both human and capital and strong partnerships with local governments. Further, the sustainability of these groups also depends on their existing capacities of functioning and organization. 65 Observations deem that no clear exit arrangements and no clear guidelines were formulated to ensure sustainability of these informal institutions. On the central management front, the sustainable land management activities are likely to function smoothly with the establishment of the new SLM unit within the National Soil Service Center, as well as the continued mandate of and services delivered by the Center. A sustainability model that was established as part of the evaluation concluded that SLM activities that have been put in place are sustainable resulting increased income and positively affecting the productivity of their land resources. Sustainability showed significant dependence on income (< 2e-16 ***) and productivity (< 2e-16 ***). In addition, sustainability at the farm or gewog levels will hold true since in the past project intervention years, support in the areas of group formation has been visible with by-laws, guidelines, joint bank accounts, trainings, etc. awarded with an aim to make groups self-sustaining. Lessons learnt The project design in terms of multi-sectoral approach and phase-wise implementation models worked well and did not show any signs of serious weaknesses. Such approaches were instrumental for unleashing the communities’ potential for socioeconomic transformation, as well as building capacity. The phase-wise implementation of SLM activities provided adequate time for all stakeholders to learn from the earlier interventions. The broad-based nature of SLM activities was successful in equitable distribution of benefits in all the nine gewogs right from the planning stage to implementation by involving the local people. SLM manuals and GIS-based digitized maps were proven very useful to identify “hotspots” of degraded areas and facilitated participatory natural resource mapping. The Participatory SLM Action Planning methodology were proven to be an excellent approach for community-based planning of SLM, enhancing community commitment and ownership, facilitating inclusion of local knowledge in decision-making and participation of all households including women. The participatory approach created conducive environment allowing communities to work together and build social capital resulting in informal labor groups and adopting a community approach vis-à-vis household or individual approach. Such participatory approach contributed to mainstreaming gender, ensuring equity and improvement of livelihoods of the poor. The two-tier approach comprising of interventions of short-term combined with long-term outcomes pursued by the project has worked well with beneficiaries being able to accrue immediate benefits in the process, as well as long-term benefits. This is extremely relevant when the target group is the most vulnerable and poor. In such instances, more time is needed to understand and accept new practices. Planning and fund management at the local level and preparation and submission of reports to the center not only helped build capacity of farmers on promoting participatory management and grass root empowerment but also reduced unnecessary bureaucracy, eliminated administrative bottlenecks and reinforced accountability for project outcomes, placing decision making closer to the beneficiaries. 66 It was learnt that SLM activities taught farmers on optimizing usage of the limited agricultural land through various integrated activities. A great deal of awareness and advocacy on mitigating land degradation undertaken by the SLMP has built capacity of the farmers appreciating the long-term benefits of protecting farm land especially in preventing loss of fertile top soil. The participatory sustainable land management action planning methodology proved its capacity and suitability as a tailor-made planning approach. However, blanket approaches for planning purposes was not suited because of the spatial variability and heterogeneity of the Bhutanese conditions. The approach was considered to be useful for broad Renewable Natural Resource (RNR) planning and all other spatial planning purposes that affect land use and the land cover of rural communities. The SLM implementation was hampered by the remoteness of rural communities and associated difficulties in reaching the inputs to such communities in time. Further, the lack of labor availability due to rural-urban migration at the household level is a key constraint for adoption and successful implementation of project interventions. As a result, vulnerable households face more constraints to adapt SLM intervention through a combined effect of small land holdings, the need for direct returns of their limited land holdings, a general lack in farm labor and lack of access to markets. Way Forward It is important to understand combining a package (SLM program) for both short-term and long- term benefits as practiced towards the later part of the project period will be a critical success factor. As short-term interventions, promotion of improved farm yard manure, cattle sheds, stone bunds and Napier hedgerows are recommended since they proved to generate both beneficial impact on the land, through reduction of land degradation processes, and at the same time impacted with direct benefits on the livelihoods of farming households. The SLM activities such as protecting upstream resources can offer contributions to watershed protection, which further benefits downstream hydropower generation. Therefore, a future financial arrangement such as a plough back mechanism or payment for environmental services would keep farmers encouraged to adopt SLM activities and help contribute towards enhancing rural cash income generation. It is important to strengthen the Land Management Unit at the National Soil Service Center and in the Renewal Natural Resource Centers with adequate staffing and other resources prior to opening up nodal agencies in the regional research and development centers. It is proposed that responsible agencies should continue efforts to mainstream sustainable land management principles into sectoral plans and programs by preparing national level SLM work plan and budget for the Eleventh Five-Year Plan by compiling plans from gewogs and dzongkhags, which will be essential for the effective development of SLM approaches. In addition, for the sustainability of project interventions and learning, SLM approaches and 67 practices should be replicated and scaled up in other parts of Bhutan and included beyond the Eleventh five-Year Plan. Sustainable Land Management being a multi-sectoral approach with long-term benefits would deem continued stakeholder sensitization and awareness creation at all levels starting from the center to the gewog and chiwog levels. Efforts should be made to align the national action plan to combat land degradation with the ten- year strategic plan and framework for the United Nations Convention to Combat Desertification. The UNCCD’s ten-year plan sets out operational objectives on issues including awareness raising, policy framework, science and technology and capacity building to enhance the implementation of the Convention. It will also be beneficial to undertake economic assessment of land degradation and sustainable land management practices and its impacts in Bhutan. 68 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders No specific comments received. 69 Annex 9. List of Supporting Documents 1. Project Implementation Plan 2. Project Appraisal Document for Kingdom of Bhutan Sustainable Land Management Project (SLMP) dated December 2, 2005 (Report No: 34479-BT) 3. Aide Memoires, Back-to-Office Reports and Implementation Status and Results Reports. 4. SLMP Annual Reports, M&E Reports and Progress Reports. 5. Borrower's Evaluation Report dated October 2013 6. Environmental Assessment 7. Social Assessment 8. Project publications and reports • Biodiversity Assessments (unpublished) • Chopyel, P. 2009. Rangeland management in Bhutan. 64 p.. (unpublished) • EUSPS Component Completion Reports and Programme Completion Report (unpublished) • Kyingkshor Consultancy Services, 2009. Cost benefits analysis report on SLM interventions. Volume I. 97 pp (unpublished) • NSSC, 2011. A Report on Experience Sharing Workshop on Sustainable Land & Natural Resource Management (SL&NRM) groups, held in Gelephu from 8-10th May 2011. Building local Institutions for SL&NRM. 24 pp. (Unpublished) • NSSC, 2011. Bhutan Catalogue of Soil and Water Conservation Approaches and Technologies. National Soil Services Centre (NSSC), Department of Agriculture, Ministry of Agriculture and Forests, Royal Government of Bhutan, Thimphu. 112 pp. • NSSC, 2011. Participatory approaches in Sustainable land management. National Soil Services Centre (NSSC), Simtokha, Thimphu, Department of Agriculture, Ministry of Agriculture & Forests. 82 pp. • NSSC, 2011.Documenting the Key Lessons of Sustainable Land Management on Steep to Very Steep Slopes in Bhutan. National Soil Services Centre (NSSC), Simtokha, Thimphu, Department of Agriculture, Ministry of Agriculture & Forests. 86pp. • NSSC, 2011.Indigenous Technical Knowledge on Soil and Soil Fertility Management. National Soil Services Centre (NSSC), Simtokha, Thimphu, Department of Agriculture, Ministry of Agriculture & Forests. 107 pp. • Operations Evaluation Group, 2004. Bhutan – Country Assistance Evaluation. The World Bank, Washington DC • Phase I and II Reports on DrukDIF (unpublished) 70 • Rural livelihoods and peri-urban analysis. Volume I. 99pp. (unpublished) • Self-Assessment in Preparation for the Joint MTR of the SLMP Bhutan (Unpublished) • van Noord, 2010. Participatory mapping of natural resources. 37 pp. (unpublished) 9. Other publications • Bhutan CAS: Report No. 33704-BT7 FY2006-2009, The World Bank. • Bhutan CPS: Report No: 56577-BT for 2011-2014; dated October 27, 2010, The World Bank. • Branca, G., Lipper, L., McCarthy, N., Jolejole, M.C. 2013. Food security, climate change, and sustainable land management. A review. Agron. Sustain. Dev. (2013) 33:635–650. • GNHC 2013. Bhutan Eleventh Five-Year Plan – Volume 1. http://www.gnhc.gov.bt/wp-content/uploads/2013/11/Eleventh-Five-Year-Plan- Volume-I-Final.pdf • Kubiszewski, I., R. Costanza, L Dorji, P. Thoennes, K. Tshering. 2013. An Initial Estimate of the Value of Ecosystem Services in Bhutan. Ecosystem Services 3: e11- e21 • Nkonya, E., Gerber, N, von Braun, J. and De Pinto, A. 2011. The Economic of Land Degradation. The costs of action versus inaction. IFPRI (International Food Policy Research Institute) Issue Brief 68, September 2011. 8pp • Nkonya, E., Srinivasan, R., Anderson, W and Kato, E. 2013 (draft). Assessing the economic benefits of sustainable land management practices in Bhutan. International Food Policy Research Institute. 29pp. • Price, K. 2011. Effects of watershed topography, soils, land use and climate in base flow hydrology in humid regions: A review. Progress in Physical Geography 35 (4): 465 – 492. • TerrAfrica, 2005 (http://www.fao.org/nr/land/sustainable-land-management/en/) • UNCCD 2011, Benefits of Sustainable Land Management. 15 pp. http://www.unccd.int/Lists/SiteDocumentLibrary/Publications/CSD_Benefits_of_S ustainable_Land_Management%20.pdf 71 89°E 90°E 91°E 92°E BHUTAN SUSTAINABLE LAND MANAGEMENT PROJECT (SLMP) PROJECT GEWOGS (SUB-DISTRICTS) BHUTAN CITIES AND TOWNS DZONGKHAG (DISTRICT) CAPITALS NATIONAL CAPITAL GEWOG (SUB-DISTRICT) BOUNDARIES DZONGKHAG (DISTRICT) BOUNDARIES INTERNATIONAL BOUNDARIES 28°N GASA 28°N Gasa Thunkar TRASHI LHUENTSE 'YANGTSE PUNAKHA BUMTHANG Shingkarap THIMPHU Tang Punakha Lhuentse Trashi Tango Chari WANGDUE ’Yangtse PARO Lobesa PHODRANG Jakar Trongsa Paro THIMPHU Wangdue Haa TRONGSA Khasadrapchu Radi Monggar HAA Lingmithang Trashigang Kisona Zhemgang TRASHIGANG Nangkor MONGGAR Wamrong Tendru Yebilaptsha Bardo Lumang Chhukha Daga Pema Gatshel Thrimshing CHHUKHA Damphu ZHEMGANG 27°N SARPANG PEMA SAMDRUP 27°N G SAMTSE DAGANA Goshing JONGKHAR AN Logchina Bongo Panka GATSHEL Daifam IR Samtse Phuentsholing Samdrup TS Sarpang Panbang Nganglam Phuentsholing Jongkhar DECEMBER 2013 IBRD 40598 0 10 20 30 40 Kilometers This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank 0 10 20 30 Miles GSDPM Map Design Unit Group, any judgment on the legal status of any territory, or any 90°E 91°E endorsement or acceptance of such boundaries.